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After concessions by the parties,1 the issues remaining for
decision are as follows:
(1) Whether petitioner may exclude from gross income under
section 104(a)(2)2 proceeds from the settlement of a lawsuit that
she received in the year in issue. We hold that she may not.
(2) Whether petitioner is entitled to an earned income
credit for Amanda Roland. We hold that she is not.
FINDINGS OF FACT
Virtually all of the facts have been stipulated, and they
are so found. Petitioner resided in Mobile, Alabama, at the time
that her petition was filed with the Court.
A. Receipt of Settlement Proceeds From the Lawsuit
Prior to the year in issue, petitioner purchased various
insurance policies from Liberty National Life Insurance Co. and
Torchmark Corp. (collectively, Liberty Life). Petitioner
purchased these policies in order to provide comprehensive health
care coverage. The policies included individual medical expense
policies, hospital accident policies, hospital confinement and
1 At trial, petitioner conceded that she failed to report
(1) wages in the amount of $89 and (2) interest income in the
amount of $83, and respondent conceded, inter alia, that
petitioner is entitled to a dependency exemption for Amanda
Roland. See infra note 3 regarding respondent’s additional
concession.
2 Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for 1995, the taxable year in
issue, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
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