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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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Last modified: May 25, 2011