- 7 - term emotional distress includes symptoms (e.g., insomnia, headaches, stomach disorders) which may result from such emotional distress.”5 H. Conf. Rept. 104-737, at 301 n.56 (1996), 1996-3 C.B. 741, 1041. Respondent determined that petitioner must include the $58,000 amount in income because none of it was received on account of any physical injury or physical sickness. Conversely, petitioner asserts that the entire $58,000 amount is excludable from income under section 104(a)(2) because she received it for personal injuries she sustained during her pregnancy and the premature birth of her twins. Petitioner must satisfy two requirements to exclude the $58,000 amount from income under section 104(a)(2). She must prove first that the underlying cause of action giving rise to her recovery of the payment is based upon tort or tort type rights, and second that the payment was received on account of 5Petitioner’s complaint raised intentional infliction of emotional distress as a cause of action. However, the Small Business Job Protection Act of 1996, Pub. L. 104-188, sec. 1605, 110 Stat. 1838 (the 1996 amendment), amended sec. 104(a)(2) to narrow the exclusion for personal injury damages received pursuant to a judgment or settlement, effective for amounts received after Aug. 20, 1996. Under the 1996 amendment, personal injury or sickness must be physical.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
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