- 8 -8
237 (1992); Alexander v. Commissioner, 72 F.3d 938, 942 (1st Cir.
1995), affg. T.C. Memo. 1995-51. Accordingly, we sustain
respondent's determination.
2. Prejudgment Interest
Petitioners contend that prejudgment interest is excludable
from gross income. They rely on section 104(a), which permits
taxpayers to exclude "damages received (whether by suit or
agreement * * *) on account of personal injuries or sickness".
Contrary to well-established precedent, petitioners contend that
the receipt of prejudgment interest is tantamount to the receipt
of "damages" within the meaning of section 104(a)(2). In the
seminal case Kovacs v. Commissioner, 100 T.C. 124 (1993), affd.
without published opinion 25 F.3d 1048 (6th Cir. 1994), and in
every case this Court has decided since, we have consistently
held that statutorily mandated prejudgment interest does not
constitute "damages" within the meaning of section 104(a)(2).
See, e.g., Robinson v. Commissioner, 102 T.C. 116 (1994); Delaney
v. Commissioner, T.C. Memo. 1995-378; Forest v. Commissioner,
supra; Burns v. Commissioner, T.C. Memo. 1994-284; see also
Brabson v. United States, 73 F.3d 1040 (10th Cir. 1996).
Prejudgment interest imposed by R.I. Gen. Laws sec. 9-21-10 is
indistinguishable from the prejudgment interest at issue in
Kovacs and its progeny. Delaney v. Commissioner, T.C. Memo.
1995-378; Forest v. Commissioner, supra; see Delaney v.
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