Issue

Do the monies or amounts received by an egg donor in exchange for her eggs constitute taxable income?

Related Tax Rules or Regulations

Internal Revenue Code Section 61 provides that gross income includes all income from whatever sources derived, including compensation for services.

Internal Revenue Code Section 104(a)(2) excludes from taxable income the amount of any damages (other than punitive damages) received on account of personal injuries or physical sickness.

Income Tax Regs sec. 1.104-1(c)(1) defines the term “damages” as “an amount received (other than workers’ compensation” through prosecution of a legal suit or action, or through a settlement agreement entered into in lieu of prosecution.”