- 8 -8
trust account in the total amount of $558,438 were made to Weisel
in November and December 1989.
Payment to Petitioner
In November and December 1989, pursuant to the Weisel-
petitioner sharing agreement, petitioner received from Weisel
payments totaling $279,219 (viz, the Weisel payment).
Discussion
I. Deficiency
A. Introduction
We must determine whether the Weisel payment is excludable
from gross income pursuant to section 104(a)(2). In pertinent
part, section 104(a)(2) provides: “gross income does not include
* * * the amount of any damages received (whether by suit or
agreement * * * ) on account of personal injuries or sickness”.
Petitioner argues that the Weisel payment is a recovery for
damage to his professional reputation as a result of the problems
arising out of the construction and performance of the
cogeneration facility and, thus, is excludable under section
104(a)(2) as damages received on account of personal injuries.
Petitioner claims that the Weisel payment was made in liquidation
of claims asserted in the first complaint against the S-P parties
in the Biomass lawsuit. Respondent argues that the settlement
agreement did not settle any claims of personal injury and that
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011