The petitioners, a married couple, had a disabled child that they attempted to provide for via income-producing real estate. The petitioners engaged in multiple I.R.C. Sec. 1031 exchanges that ultimately, and upon their tax advisor's advice, turned into an abusive tax shelter. They received $375,000 in settlement of their claims of a lawsuit against their accountants and claimed the sum was not taxable as a return of capital. In essence, the petitioners claimed that the award represented compensatory damages for losses they suffered due to accountant negligence with respect to the disposition of their real property. The IRS claimed the amount was fully includible in income as damages for lost profits. The Court noted that generally such awards represent a return of capital that is not includible in the taxpayer's income. Under the facts of the case, the petitioners claimed amounts exceeding what they could prove was lost. Thus, some portion of the $375,000 award will be includible in income and some will be a non-taxable return of capital. Cosentino v. Comr., T.C. Memo. 2014-186.