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Wesson v. United States, 48 F.3d 894, 898 (5th Cir. 1995); Kovacs
v. Commissioner, 100 T.C. 124, 128 (1993), affd. without
published opinion 25 F.3d 1048 (6th Cir. 1994).
Courts have consistently held that prejudgment interest
received on funds awarded for personal injuries does not qualify
for the exclusion from income under section 104(a)(2). See,
e.g., Rozpad v. Commissioner, 154 F.3d 1, 5 (1st Cir. 1998),
affg. T.C. Memo. 1997-528; Aames v. Commissioner, 94 T.C. 189,
192-193 (1990).
Under Louisiana law, in order that a plaintiff might be made
whole after an injury, courts are required to award prejudgment
interest on personal injury damages. See La. Rev. Stat. Ann.
sec. 13:4203 (West 1999); Lewis v. Macke Bldg. Serv., Inc., 524
So.2d 16 (La. Ct. App. 1988); Davis v. Le Blanc, 149 So.2d 252
(La. Ct. App. 1963).
Respondent asserts that $143,407 of the total $320,880
petitioner received in connection with her personal injuries
($17,930 from the Doctor's Insurance and $125,477 from the
State's Insurance) constitutes interest income under section
61(a)(4) and is not excludable from income under section
104(a)(2).
Petitioners assert that the Agreement and the Satisfaction
of Judgment documents are evidence of a separate settlement under
which the entire $320,880 petitioner received should be treated
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