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economic injury, not personal injury. The complaint alleged lost
wages and benefits “in excess of $40,000 per year”. Because the
contract was breached with approximately 2-1/2 years remaining
(from January 1986 through June 1988), this would result in
approximately $100,000 of lost wages and benefits. The complaint
further alleged lost future wages of $150,000. Because the total
amount of compensatory damages sought by petitioner was $250,000,
we find that the entire amount was sought as a result of the
economic injury suffered by petitioner. Thus, regardless of
whether certain civil rights damages may be excluded from income
under other circumstances, they may not in this case because the
damages awarded to petitioner were not awarded on account of
personal injury or sickness. Commissioner v. Schleier, supra.
Rather, they were to make petitioner whole economically as a
result of his lost employment. Any portion of the amounts
awarded to petitioner which represent the requested compensatory
damages is not excludable from income under section 104(a)(2).
Id.; Quantum Company Trust v. Commissioner, supra.
S Corporation Loss
Background
During the years in issue, petitioner taught at Florida
Community College at Jacksonville and held several other part-
time positions. Petitioner wife was employed by the Duval County
School Board. On their joint Federal income tax returns, they
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