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from her gross income $220,723 of settlement proceeds received
from State Farm Insurance Co. (State Farm). We hold it does not.
Section references are to the Internal Revenue Code in effect for
the year in issue. Rule references are to the Tax Court Rules of
Practice and Procedure. Dollar amounts are rounded to the
nearest dollar.
FINDINGS OF FACT
Most of the facts have been stipulated and are so found.
The stipulated facts and the exhibits submitted therewith are
incorporated herein by this reference. Petitioner resided in
San Diego, California, when she petitioned the Court.
Petitioner was a claimant in the class action lawsuit (the
Lawsuit) entitled Kraszewski v. State Farm Gen. Ins. Co. The
Lawsuit was filed against State Farm in the U.S. District Court
for the Northern District of California on June 1, 1979, on
behalf of a class of women who alleged that State Farm had
engaged in sex discrimination during the recruitment, hiring, and
training of women for insurance sales agent positions within
California, in violation of title VII of the Civil Rights Act of
1964, Pub. L. 88-352, 78 Stat. 241, 253.
On April 29, 1985, the District Court ruled that State Farm
was liable for gender discrimination. See Kraszewski v. State
Farm Gen. Ins. Co., 38 Fair Emp. Prac. (BNA) Cas. 197 (N.D. Cal.
1985). The District Court found that women who attempted to
become State Farm trainee agents were "lied to, misinformed, and
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