- 7 - Respondent's determination is presumed to be correct, and petitioners bear the burden of proving otherwise. Rule 142(a). We must decide whether, and, if so, to what extent the settlement petitioners 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 appealable, approved the Tax Court's allocation of the prejudgment interest component of a settlement under Rhode Island law where the parties did not allocate any amount to prejudgment interest. The allocation of prejudgment interest in Rozpad was calculated by applying a ratio based on the judgment of the State court, to apportion the total settlement between prejudgment interest (added to the State court's tort damage award under R.I. Gen. Laws section 9-21-10) and compensatory damages. Rozpad is indistinguishable from this case. The clerk of the Rhode Island court calculated a prejudgment interest component of $88,800 to the Woodses' award and $888,000 to Jacquelyn's award under R.I. Gen. Laws section 9-21-10, which was 42.53 percent of each total award. Respondent determined that $78,190 of the $183,852 settlement with the Woodses and $790,587 of the $1,858,948 settlement with Jacquelyn was prejudgment interest by using as the ratio of prejudgment interest to total settlement the same ratio that the clerk of thePage: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011