Quantum Company Trust - Page 10




                                       - 10 -                                         
               OF ALASKA, DEPARTMENT OF PUBLIC SAFETY, JOHN HARMAN * *                
               * of and from all actions, causes of action, suits,                    
               controversies, claims, and demands of every kind and                   
               nature, mature or to mature in the future, for and by                  
               reason of any damages, costs, expenses, and compensation,              
               whether for insurance proceeds, personal injury, bodily                
               injury, property damage, out-of-pocket expenses, loss of               
               earnings, loss of use, loss of consortium, loss of                     
               services, attorney’s fees, punitive damages, or bad-faith              
               handling, or any other thing whatsoever, arising out of                
               an incident occurring on or about June 10, 1986, and any               
               and all claims embodied in David C. Norton v. John E.                  
               Harmon [sic], et al. * * *                                             
               *       *       *       *       *       *       *                      
                    This release notwithstanding, nothing in this                     
               agreement shall restrict the undersigned’s right to apply              
               * * * for a limited entry permit for the Norton Sound                  
               beach seine herring sac roe fishery, nor shall it prevent              
               the undersigned from filing an administrative appeal with              
               respect to such a permit * * *                                         
          The net amount Mr. Norton received in 1993 (after reductions for            
          attorney’s fees and costs) was $26,280.  The Nortons did not report         
          the settlement proceeds on their 1993 Federal income tax return.            
               In the notice of deficiency, respondent determined that the            
          proceeds received from the settlement of the Harman lawsuit were            
          taxable to Mr. Norton as compensation for lost fishing income.              
               Section 61(a) requires that taxpayers include in their gross           
          income all income from whatever source derived, absent a contrary           
          provision in the Internal Revenue Code (Code).  Section 104(a)(2)           
          is one such provision.  Pursuant to section 104(a)(2), gross income         
          does not include the amount of any damages received (whether by             
          suit or agreement) on account of personal injuries or sickness.             







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Last modified: May 25, 2011