View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by The University of Akron The University of Akron IdeaExchange@UAkron Akron Tax Journal Akron Law Journals 1997 Personal Injury Exclusion: Is the Slashing of Wrists Necessary? Donald J. Zahn Please take a moment to share how this work helps you through this survey. Your feedback will be important as we plan further development of our repository. Follow this and additional works at: https://ideaexchange.uakron.edu/akrontaxjournal Part of the Tax Law Commons Recommended Citation Zahn, Donald J. (1997) "Personal Injury Exclusion: Is the Slashing of Wrists Necessary?," Akron Tax Journal: Vol. 13 , Article 5. Available at: https://ideaexchange.uakron.edu/akrontaxjournal/vol13/iss1/5 This Article is brought to you for free and open access by Akron Law Journals at IdeaExchange@UAkron, the institutional repository of The nivU ersity of Akron in Akron, Ohio, USA. It has been accepted for inclusion in Akron Tax Journal by an authorized administrator of IdeaExchange@UAkron. For more information, please contact
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[email protected]. Zahn: Personal Injury Exclusion PERSONAL INJURY EXCLUSION: IS THE SLASHING OF WRISTS NECESSARY? by DONALD J. ZAHN * "Capital return... in tax accounting,payments received by taxpayer which rep- resent the individual's cost or capitaland hence not taxable as income.' I. INTRODUCTION What do damage awards really represent? Does a damage award stem- ming from a personal injury lawsuit or settlement compensate the individual for lost capabilities? Does a damage award confer a windfall upon that individual? The predecessor statute of section 104(a)(2) of the Internal Revenue Code of 19862 and the policy behind that statute equate damage awards to the wronged individual as a return of capital.3 As years passed, the courts, as well as Congress refined the return of capital concept, expanding the concept to include within its boundaries all forms of personal injury recoveries.