Wallace R. Noel and Robinette Noel - Page 12

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          information and that the seller was unable to transfer certain              
          business assets to petitioner.  After petitioner initiated steps            
          to rescind the transaction, the seller filed for bankruptcy.  In            
          1990, the bankruptcy court discharged petitioner's claims against           
          the seller.  As a result of the bankruptcy court's decision,                
          petitioner claimed a long-term capital loss of $357,356 in his              
          1990 Federal income tax return related to the T.J. Cinnamons                
          Bakery franchise.  The items that constitute the $357,356 were              
          not separately identified in petitioner's Federal income tax                
          return.  Respondent limited the loss to petitioner's original               
          basis of $241,058.                                                          
          Exclusions Under Section 104(a)(2)                                          
               Petitioner did not report $1,280,331 of the $3,250,071                 
          received from PepsiCo as income on his 1990 Federal income tax              
          return.  Petitioner's C.P.A. advised him that the amount was                
          excludable, pursuant to section 104(a)(2), as damages received on           
          account of personal injuries.  Respondent argues that petitioner            
          has failed to establish that any portion of the amount received             
          is excludable under section 104(a)(2).  We disagree with                    
               Section 61 provides that "gross income means all income from           
          whatever source derived".  Sec. 61(a).  Unless the Internal                 
          Revenue Code specifically provides otherwise, all accessions to             
          wealth must be included in gross income.  Commissioner v. Glen-             

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