Tap any paragraph to write a margin note. Your notes collect in the Desk below the text and file under cases with @. The side-by-side margin rail opens on a larger screen.

§
Marginalia
Code · U.S. Code · Title 26 - INTERNAL REVENUE CODE · CHAPTER 1— NORMAL TAXES AND SURTAXES · Subchapter B— Computation of Taxable Income · § 130

§ 130. Certain personal injury liability assignments

930 words·~4 min read·/usc/title-26/section-130

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)In general Any amount received for agreeing to a qualified assignment shall not be included in gross income to the extent that such amount does not exceed the aggregate cost of any qualified funding assets.
(b)Treatment of qualified funding asset In the case of any qualified funding asset—
(1)the basis of such asset shall be reduced by the amount excluded from gross income under subsection
(a)by reason of the purchase of such asset, and
(2)any gain recognized on a disposition of such asset shall be treated as ordinary income.
(c)Qualified assignment For purposes of this section, the term “qualified assignment” means any assignment of a liability to make periodic payments as damages (whether by suit or agreement), or as compensation under any workmen’s compensation act, on account of personal injury or sickness (in a case involving physical injury or physical sickness)—
(1)if the assignee assumes such liability from a person who is a party to the suit or agreement, or the workmen’s compensation claim, and
(2)if—
(A)such periodic payments are fixed and determinable as to amount and time of payment,
(B)such periodic payments cannot be accelerated, deferred, increased, or decreased by the recipient of such payments,
(C)the assignee’s obligation on account of the personal injuries or sickness is no greater than the obligation of the person who assigned the liability, and
(D)such periodic payments are excludable from the gross income of the recipient under paragraph
(1)or
(2)of section 104(a).
The determination for purposes of this chapter of when the recipient is treated as having received any payment with respect to which there has been a qualified assignment shall be made without regard to any provision of such assignment which grants the recipient rights as a creditor greater than those of a general creditor.
(d)Qualified funding asset For purposes of this section, the term “qualified funding asset” means any annuity contract issued by a company licensed to do business as an insurance company under the laws of any State, or any obligation of the United States, if—
(1)such annuity contract or obligation is used by the assignee to fund periodic payments under any qualified assignment,
(2)the periods of the payments under the annuity contract or obligation are reasonably related to the periodic payments under the qualified assignment, and the amount of any such payment under the contract or obligation does not exceed the periodic payment to which it relates,
(3)such annuity contract or obligation is designated by the taxpayer (in such manner as the Secretary shall by regulations prescribe) as being taken into account under this section with respect to such qualified assignment, and
(4)such annuity contract or obligation is purchased by the taxpayer not more than 60 days before the date of the qualified assignment and not later than 60 days after the date of such assignment.
(Added Pub. L. 97–473, title I, § 101(b)(1), Jan. 14, 1983, 96 Stat. 2605; amended Pub. L. 99–514, title X, § 1002(a), Oct. 22, 1986, 100 Stat. 2388; Pub. L. 100–647, title VI, § 6079(b)(1), Nov. 10, 1988, 102 Stat. 3709; Pub. L. 105–34, title IX, § 962(a), Aug. 5, 1997, 111 Stat. 891.)
Connections4 cite this · traces to 2
20 references not yet in our index
  • Pub. L. 97–473, title I, § 101(b)(1)
  • 96 Stat. 2605
  • Pub. L. 99–514, title X, § 1002(a)
  • 100 Stat. 2388
  • Pub. L. 100–647, title VI, § 6079(b)(1)
  • 102 Stat. 3709
  • Pub. L. 105–34, title IX, § 962(a)
  • 111 Stat. 891
  • Pub. L. 105–34, § 962(a)(1)
  • Pub. L. 105–34, § 962(a)(2)
  • Pub. L. 105–34, § 962(a)(3)
  • Pub. L. 100–647
  • Pub. L. 99–514
  • Pub. L. 105–34, title IX, § 962(b)
  • 111 Stat. 892
  • Pub. L. 100–647, title VI, § 6079(b)(2)
  • 102 Stat. 3710
  • Pub. L. 99–514, title X, § 1002(b)
  • Pub. L. 97–473, title I, § 101(c)
  • 96 Stat. 2606
Citation graph
cites case law
§ 130
Certain personal injury liability assignments
Stat.×4
U.S.C.§ 140
U.S.C.§ 104
Pub. L.Pub. L. 97–473, title I, § 101(b)(1)
Stat.96 Stat. 2605
Pub. L.Pub. L. 99–514, title X, § 1002(a)
Stat.100 Stat. 2388
Pub. L.Pub. L. 100–647, title VI, § 6079(b)(1)
Cites 22 · showing 7Cited by 4 across 1 source
★   the supreme law of the land   ★
Don't Tread on Me
E Pluribus Unum — out of many, one

"If you don't know your rights, you don't have any."

Marginalia · a citizen's law index
A research desk, not legal advice. Always read the cited source before relying on a summary.
Questions or an issue? support@self-law.org
disclaimerMarginalia is a research index, not a law firm. Nothing on this site is legal, tax, or financial advice and no attorney–client relationship is formed by using it. Statutes, regulations, and case law change; summaries, search results, AI output, and member posts may be incomplete, out of date, or wrong. Any interpretation drawn from material on this site should be validated by a licensed attorney in your jurisdiction before you act on it.