T.C. Memo. 2003-240
UNITED STATES TAX COURT
SANDRA G. VENABLE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 10888-02. Filed August 13, 2003.
On Aug. 26, 1994, P filed a malicious prosecution
lawsuit in Texas against a former business associate.
After trial to a jury, P was awarded a favorable
verdict and judgment in August of 1996. A State
appellate court affirmed, and the Texas Supreme Court
denied review in 1998. The former business associate
then satisfied the judgment by means of a check dated
Oct. 29, 1998.
Held: Sec. 104, I.R.C., as amended by the Small
Business Job Protection Act of 1996, Pub. L. 104-188,
sec. 1605, 110 Stat. 1838, is applicable to determine
excludability from gross income of the damages P
received.
Held, further, the payment P received pursuant to
the malicious prosecution lawsuit is not excludable
from gross income for 1998 under sec. 104, I.R.C.
There is no evidence that any of the judgment award was
received on account of a personal physical injury or
physical sickness as required by sec. 104(a)(2),
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