Steven P. and Maureen Cade - Page 14




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          104(a)(2) does not exclude damages which are “received pursuant             
          to the settlement of economic rights arising out of a contract              
          (e.g., lost profits)”); Gregg v. Commissioner, T.C. Memo. 1999-             
          10; Kightlinger v. Commissioner, T.C. Memo. 1998-357.  We hold              
          that section 104(a)(2) does not operate to exclude from                     
          petitioner’s gross income any of the $2,315,000 at issue.                   
               As to the $10,000 in dispute, petitioner was paid that                 
          amount by virtue of the fact that the jury had concluded that his           
          personal property had been converted by CGC and the Heller Group.           
          Petitioner was paid the $10,000 as a compensation for property              
          damage and not on account of a personal injury.  We conclude and            
          hold that the $10,000 is not excluded from petitioner’s gross               
          income by virtue of section 104(a)(2).                                      
               We have considered all of the parties’ arguments and, to the           
          extent not discussed above, find them to be without merit.  To              
          reflect the foregoing,                                                      
                                                  Decision will be entered            
                                             under Rule 155.                          

















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