111 T.C. No. 17
UNITED STATES TAX COURT
CARL J. FABRY AND PATRICIA P. FABRY, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 9126-96. Filed December 16, 1998.
Ps sued the manufacturer of an agricultural
chemical, claiming tortious injury to their nursery
business. The suit was settled and Ps received a
payment, of which $500,000 was allocable to their claim
of injury to their business reputation. Ps argue that
damages received on account of injury to business
reputation are, as a matter of law, received on account
of personal injuries within the meaning of sec.
104(a)(2), I.R.C.
Held: Whether damages received on account of
injury to business reputation are on account of
personal injuries within the meaning of sec. 104(a)(2),
I.R.C., is a question of fact. Held, further, Ps have
failed to prove that the $500,000 payment in question
was received on account of personal injuries within the
meaning of sec. 104(a)(2), I.R.C.
Robert S. MacDonald and Brian J. Moran, for petitioners.
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