Thomas B. Hawkins and Leanna L. Hawkins, Deceased - Page 7

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                         (2) the amount of any damages (other than                    
                    punitive damages) received (whether by suit or                    
                    agreement and whether as lump sums or as periodic                 
                    payments) on account of personal physical injuries                
                    or physical sickness;                                             
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               * * * For purposes of paragraph (2), emotional distress                
               shall not be treated as a physical injury or physical                  
               sickness.  The preceding sentence shall not apply to an                
               amount of damages not in excess of the amount paid for                 
               medical care * * * attributable to emotional distress.                 
               The legislative history accompanying passage of the SBJPA              
          clarifies that “the term emotional distress includes symptoms               
          (e.g., insomnia, headaches, stomach disorders) which may result             
          from such emotional distress.”  H. Conf. Rept. 104-737, at 301              
          n.56 (1996), 1996-3 C.B. 741, 1041.  Post-SBJPA section 104 is              
          generally effective for amounts received after August 20, 1996,             
          in tax years ending after such date.  SBJPA sec. 1605(d), 110               
          Stat. 1839.                                                                 
               Petitioners assert that petitioner suffered physical                   
          sickness and injury in the form of emotional distress and that a            
          portion of the damages award should be excluded from their gross            
          income.  The language of section 104(a)(2) and the accompanying             
          legislative history make clear that damages for emotional                   
          distress and resultant symptoms are not excluded from gross                 
          income by section 104(a)(2).                                                







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