- 2 -
of his employment relationship with Holnam, Inc., is excludable
under section 104(a)(2)2 as damages received on account of
personal injury or sickness.3
FINDINGS OF FACT
Petitioners resided in Cheyenne, Wyoming, at the time their
petition was filed. In 1975, petitioner, who had obtained a
college degree in engineering, began employment with Ideal Cement
Industries. Holnam, Inc. (Holnam), became the successor to Ideal
Cement Industries. In 1985, petitioner was selected to go to
Montana to manage a plant that had not performed well. By 1990,
the plant’s performance had improved. As of 1993, petitioner had
been promoted to regional sales manager for Montana, and his
office was located in Bozeman, Montana. During 1993, Holnam
announced a reorganization of the sales portion of its
organization, and petitioner's position was to be eliminated.
Although the Bozeman office was to remain open and a position
higher than petitioner’s was to continue, the higher level
position in Bozeman was offered to a Holnam employee from
1(...continued)
joint return with Darrell D. Moran, who will be referred to as
petitioner in this opinion.
2 Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the period under
consideration, and all Rule references are to this Court’s Rules
of Practice and Procedure.
3 Two other adjustments were set forth in the notice of
deficiency, both of which were computational and dependent on the
outcome of the question of excludability of the $37,840 amount.
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