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as a result of his 1991 collapse, the evidence supports the
conclusion that the 1998 settlement payment was in fact, as the
settlement agreement stated, intended by the Company to
compensate for the far more pervasive emotional distress.
Accordingly, the $30,000 is not excludable from income,
except to the extent actually paid for medical care attributable
to the emotional distress. Petitioners have not directed our
attention to any particular amounts paid for such medical care.
The only reference in the record to specific charges incurred for
Mr. Oyelola’s treatment is the $749.24 shown as billed to his
insurance company in 1991. There is no indication that
petitioners were ever held responsible for any of this amount.
Additionally, as respondent points out on brief, it is noteworthy
that the settlement designated $7,824 for the cost of COBRA
insurance coverage, such that Mr. Oyelola’s medical expenses and
needs would appear to have been contemplated and provided for by
means other than the $30,000 payment. We hold that the $30,000
is not excludable from gross income under section 104(a).
To reflect the foregoing and concessions made,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011