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(hereinafter referred to individually as Mr. and Mrs. Prasil)
Federal income tax for the taxable year 1999 in the amount of
$2,183.
After concessions by the parties,2 the issue for decision is
whether a $7,650 payment that Mrs. Prasil received in 1999 in
settlement of a claim against her former employer is excludable
from petitioners’ gross income under section 104(a)(2). We hold
that it is not.
FINDINGS OF FACT
Some of the facts were stipulated, and they are so found.
Petitioners resided in Iowa Park, Texas, at the time that the
petition was filed with the Court.
For a few months ending in early 1995, Mrs. Prasil worked
for Heartland Realty Investors, Inc. (Heartland) in Rochester,
Minnesota. Mrs. Prasil’s boss was an individual by the name of
Gary Lakner (Mr. Lakner). Mrs. Prasil alleged that during her
brief tenure at Heartland, Heartland and Mr. Lakner subjected her
to sex discrimination and harassment. The record does not
disclose the nature of the alleged sex discrimination that she
experienced.
2 Petitioners concede that they failed to report: (1)
Interest income, (2) pension and annuity income, and (3)
additional tax under sec. 72(t) on a premature distribution from
a qualified retirement plan. Respondent concedes that
petitioners are not liable for self-employment tax under sec.
1401, and hence they are not entitled to a self-employment tax
deduction under sec. 164(f).
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