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Business
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| Number of pages / Number of words: |
5 / 1269 |
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The awards of punitive damages are taxable under §104(a)(2), although the award for pain and suffering under §104(a)(2) are not taxable. The award of $200,000 for compensation for emotional distress is taxable under 104(a)(2), in flush paragraph under section 104(a)(5) it states “For purposes of paragraph (2) , emotional distress shall not be treated as a physical injury or physical sickness...
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“Citing the rationale in Hawkins, (footnote 4.1) the Tax Court held that emotional distress damages for injury to human capital were damages received on account of personal nonphysical injuries or nonphysical sickness and not excludable from gross income.†The award of $1,000,000 for lost wages is taxable as compensation under §61...
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