- 2 - excludable from income under section 104(a)(2), as petitioners contend, or is interest includable in income under section 61(a)(4), as respondent contends. We hold that it is interest. Unless otherwise specified, section references are to the Internal Revenue Code in effect for 1994, and Rule references are to the Tax Court Rules of Practice and Procedure. FINDINGS OF FACT Some of the facts have been stipulated and are so found. Petitioners resided in Slidell, Louisiana, when they filed the petition. A. The Lawsuits 1. The First $100,000 of Damages On June 5, 1985, petitioners filed a medical malpractice lawsuit against Pendleton Memorial Methodist Hospital, et al. (Pendleton Hospital), in the Civil District Court for the Parish of New Orleans, Louisiana (State court). Louisiana law limits the liability of qualified health care providers for malpractice claims to $100,000, plus interest. La. Rev. Stat. Ann. sec. 40:1299.42(B)(2) (West 2001). In April 1992, petitioners settled their claim against Pendleton Hospital for $75,000. This ended the hospital’s liability for the first $100,000 under the Louisiana Medical Malpractice Act.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
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