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settlement payment, was paid by du Pont by reason of, or because
of, the loss of the plaintiffs’ business reputation or the loss
of their reputation as orchid growers, we nonetheless addressed
petitioner’s contention that “Damage to reputation is clearly
personal injury for the purpose of IRC � 104(a)(2)”. We consid-
ered that contention solely “for the sake of completeness”.
Henry v. Commissioner, 77 T.C.M. (CCH) at 2222, 1999 T.C.M. (RIA)
at 1255. We did not address that contention of petitioner
because we needed to do so in order to resolve the issue pre-
sented under section 104(a)(2) regarding the $1,623,203 settle-
ment payment, and we expressly so stated in our opinion. See id.
As we understood petitioner’s position in Henry I, petitioner was
contending that damage to reputation is, as a matter of law,
personal injury within the meaning of section 104(a)(2). We
noted that we had rejected such an argument in Fabry v. Commis-
sioner, 111 T.C. 305 (1998), and we rejected any such argument in
Henry I. See id.
We then described our approach and analysis in Fabry I and
applied the same approach and analysis in Henry I. We stated in
Henry I:
assuming arguendo that the $1,623,203 settlement pay-
ment which petitioner received from du Pont during 1994
had been paid for loss of his business reputation and
loss of his reputation as an orchid grower, that pay-
ment was not made on account of personal injuries
within the meaning of section 104(a)(2). [Emphasis
added.]
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