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$18,984 under section 212(1). The parties do not dispute this
amount.
Discussion
Petitioner contends that his entire settlement is excludable
under section 104(a), and that he did not receive prejudgment
interest because the parties did not allocate any amount to it
and because the money he received was paid pursuant to an out-of-
court settlement. We disagree.
A taxpayer may exclude from income "damages received
(whether by suit or agreement * * *) on account of personal
injuries or sickness". Sec. 104(a)(2). However, prejudgment
interest is not excludable from income under section 104(a)(2).
Rozpad v. Commissioner, 154 F.3d 1, 6-7 (1st Cir. 1998), affg.
T.C. Memo. 1997-528; Kovacs v. Commissioner, 100 T.C. 124 (1993),
affd. without published opinion 25 F.3d 1048 (6th Cir. 1994);
Delaney v. Commissioner, T.C. Memo. 1995-378, affd. 99 F.3d 20
(1st Cir. 1996); Forest v. Commissioner, T.C. Memo. 1995-377,
affd. without published opinion 104 F.3d 348 (1st Cir. 1996).
Respondent's determination is presumed to be correct, and
petitioner bears the burden of proving otherwise. Rule 142(a).
We must decide whether, and, if so, to what extent the
$142,000 settlement petitioner received was prejudgment interest,
and whether it is excludable from income under section 104(a)(2).
In Rozpad v. Commissioner, supra, the U.S. Court of Appeals
for the First Circuit, the circuit in which this case is
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