Willie Mae Barlow Davis - Page 5

                                        - 5 -                                         
               A motion for summary adjudication may be granted if the                
          pleadings and other materials demonstrate that no genuine issue             
          of material fact exists, and the decision may be rendered as a              
          matter of law.  Rule 121(b); Sundstrand Corp. v. Commissioner, 98           
          T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th Cir. 1994).  As                
          noted above, the parties agree that the issues in this case may             
          be resolved by summary adjudication, and we are satisfied that no           
          genuine issue exists as to the material facts.                              
               First, we address whether the punitive damages petitioner              
          received may be excluded under section 104(a)(2).  Respondent               
          contends that this issue is controlled by the recent Supreme                
          Court decision in O'Gilvie v. United States, 519 U.S. 79, 117               
          S. Ct. 452 (1996).  In O'Gilvie v. United States, supra, the                
          Supreme Court held that the exclusion of section 104(a)(2) does             
          not apply to punitive damages.  Id. at ___, 117 S. Ct at 454.               
          Therefore, respondent argues that petitioner's punitive damage              
          award of $6 million is fully taxable.                                       
               Petitioner points out that the Supreme Court in O'Gilvie v.            
          United States, supra, interpreted section 104(a)(2) as it read in           
          1988.  Petitioner notes that section 104(a)(2) was amended in               
          1989, and since the award was paid to petitioner in 1992,                   
          petitioner argues that the rule in O'Gilvie does not apply to               
          this case.  We disagree.  The 1989 amendment to section 104(a)(2)           
          was enacted in the Omnibus Budget Reconciliation Act of 1989                
          (OBRA 1989), Pub. L. 101-239, sec. 7641(a), 103 Stat. 2106, 2379.           




Page:  Previous  1  2  3  4  5  6  7  8  Next

Last modified: May 25, 2011