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customer mailing list, (2) engaged Carrera’s employees to
entice them into employment with Pro-Formance, (3) engaged
Carrera’s suppliers for the purpose of manufacturing a
competing product, (4) breached fiduciary duties owed to
petitioner and Carrera, or (5) defamed Mr. Anderson and Carrera
injuring their respective reputations. Petitioners have failed
to show which of these improper acts was considered by the jury
to convince it to reach a verdict for Mr. Anderson.3
Where the award for damages is rendered by a jury verdict
and judgment, and has been clearly allocated to an identifiable
claim, we are guided by the nature of the claim as identified
under State law personal injury concepts. See Threlkeld v.
Commissioner, 87 T.C. 1294, 1305-1306 (1986), affd. 848 F.2d 81
(6th Cir. 1988). We find it most telling that the vast
majority of the jury award was for interference with business
relationships and only $1 was for slander. Petitioners also
argue that their damages were received pursuant to a settlement
agreement and are, therefore, entitled to an alternative
allocation. The facts do not comport with such a finding.
3 Petitioners have offered Fabry v. Commissioner, 223 F.3d
1261 (11th Cir. 2000), revg. 111 T.C. 305 (1998), for the
proposition that injury to business reputation is a personal
injury under sec. 104(a)(2). However, as discussed above,
petitioners have failed to show that Mr. Anderson’s damages
received were on account of a personal injury. Instead, the jury
decided that the vast majority of Mr. Anderson’s injuries
occurred to his property and his property rights associated with
Carrera.
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