John R. and Sara E. Wise - Page 10

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          wrongful termination, petitioners are not entitled to exclude from          
          income any part of the proceeds received.                                   
               Petitioners have not proven what portion, if any, of the               
          $1,125,000 payment was received in settlement of tort or tortlike           
          claims.  The General Release does not make any allocation between           
          tort (or tortlike) claims and other types of claims.  The General           
          Release identifies many potential claims which could be interpreted         
          as sounding in contract or in tort.  Thus, from the record before           
          us it is impossible to differentiate the actual basis for                   
          settlement.  And failure to show the specific amount of the payment         
          allocable to the claims of tort or tortlike damages for personal            
          injuries results in the entire amount's being presumed not to be            
          excludable.  See Taggi v. United States, 35 F.3d 93, 96 (2d Cir.            
          1994); Getty v. Commissioner, 91 T.C. 160, 175-176 (1988), affd. on         
          this issue and revd. on other issues 913 F.2d 1486 (9th Cir. 1990).         
               Petitioner asserts that the General Release settled his claim          
          for damages for personal injuries. We do not agree. The General             
          Release does not state that the amount petitioner received was paid         
          to settle a potential personal injury claim against WC.  And where          
          a settlement agreement lacks express language stating what the              
          settlement amount was paid to settle, then the most important factor        
          is the intent of the payor.  Knuckles v. Commissioner, 349 F.2d 610,        
          612-613 (10th Cir. 1965), affg. T.C. Memo. 1964-33.                         

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