Charles Leonard Braden and Joice Stieber Braden - Page 12

                                       - 11 -                                         
             Seay v. Commissioner, 58 T.C. 32, 37 (1972).  The ultimate               
             character of the payment hinges on the payor’s dominant                  
             reason for making the payment.  See Fono v. Commissioner,                
             79 T.C. 680, 696 (1982), affd. without published opinion                 
             749 F.2d 37 (9th Cir. 1984); Agar v. Commissioner, 290                   
             F.2d 283, 284 (2d Cir. 1961), affg. per curiam T.C. Memo.                
             1960-21; Amos v. Commissioner, T.C. Memo. 2003-329.                      
                  As stated above, respondent’s motion for summary                    
             judgment asks the Court to hold that “none of the payments               
             made in settlement of Campbell v. State Farm are [sic]                   
             excludable from gross income under section 104(a)(2).”                   
             Respondent’s motion argues that this holding is required                 
             because Campbell v. State Farm was an action for breach                  
             of contract.  According to respondent, “payments made in                 
             settlement of breach of contract suits are specifically                  
             excluded from the definition of damages which might                      
             qualify for exclusion under the provisions of I.R.C. sec.                
             104(a)(2).”  Thus, respondent asks the Court to hold that                
             the settlement proceeds at issue do not qualify for                      
             exclusion under section 104(a)(2) solely because the                     
             lawsuit which was settled, Campbell v. State Farm, was a                 
             breach of contract suit.                                                 
                  We disagree.  The type of lawsuit, by itself, does                  
             not determine whether a payment in settlement of the                     






Page:  Previous  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  Next

Last modified: May 25, 2011