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We agree with respondent that none of the $2,315,000 falls
within the section 104(a)(2) exclusion. We apply the two
conditions for excludability set forth above. As to the first
condition, we ascertain whether the claims alleged in the lawsuit
have tortlike characteristics, placing our focus on the scope of
remedies available for those claims. See United States v. Burke,
504 U.S. 229, 234-236 (1992); Dotson v. United States, 87 F.3d
682, 685 (5th Cir. 1996); Robinson v. Commissioner, 102 T.C. 116,
125-126 (1994), revd. on an issue not relevant herein 70 F.3d 34
(5th Cir. 1995). As for the second condition, we analyze the
damages recovered on the tortlike claims to ascertain whether
those damages were recovered for personal injuries. See O'Gilvie
v. United States, supra; see also Dotson v. United States, supra
at 685. Because petitioner recovered damages under the terms of
a settlement agreement, we examine that agreement in light of the
facts and circumstances surrounding it to ascertain the nature of
the claims underlying the recovery. We ask ourselves: “What is
the payor’s intent in making the payment?”, see Knuckles v.
Commissioner, 349 F.2d 610, 613 (10th Cir. 1965), affg. T.C.
Memo. 1964-33; Agar v. Commissioner, 290 F.2d 283, 284 (2d Cir.
1961), affg. per curiam T.C. Memo. 1960-21, and "In lieu of what
were the damages awarded?", see Robinson v. Commissioner, supra
at 126-127, and the cases cited thereat. We bear in mind the
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