republic-os/legal/us/code/title-26/chapter-1/section-130.md

type, title, description, jurisdiction, corpus, kind, title_number, title_name, chapter_number, chapter_name, section, citation, status, release_point, release_date, source, source_url, source_identifier, source_file, source_hash, raw_snapshot_hash, text_hash, retrieved_at, confidence, tags

type	title	description	jurisdiction	corpus	kind	title_number	title_name	chapter_number	chapter_name	section	citation	status	release_point	release_date	source	source_url	source_identifier	source_file	source_hash	raw_snapshot_hash	text_hash	retrieved_at	confidence	tags
LegalText	26 U.S.C. § 130	Certain personal injury liability assignments	us	united_states_code	code_section	26	INTERNAL REVENUE CODE	1	NORMAL TAXES AND SURTAXES	130	26 U.S.C. § 130	current	119-100	2026-06-26	official	https://uscode.house.gov/download/releasepoints/us/pl/119/100/xml_usc26@119-100.zip	/us/usc/t26/s130	data/legal/raw/us/code/title-26/usc26.xml	fd00f38830603cf78d86c64b260ddf8193538938d60f5aa108a14b0f12b23d89	a261f094809116f42a96648a3d5eee80fa010379d67412551c21dd5c900b27f4	06894466a3a82254685302bad39bc69969b109b030aaa4a9e919439440e7626f	2026-07-04	official	legal us-code

26 U.S.C. § 130 - Certain personal injury liability assignments

Text

(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.)

Notes

Editorial Notes

Prior ProvisionsA prior section 130 was renumbered section 140 of this title.

Amendments1997—Subsec. (c). Pub. L. 105–34, § 962(a)(1), inserted “, or as compensation under any workmen’s compensation act,” after “(whether by suit or agreement)” in introductory provisions. Subsec. (c)(1). Pub. L. 105–34, § 962(a)(2), inserted “or the workmen’s compensation claim,” after “agreement,”. Subsec. (c)(2)(D). Pub. L. 105–34, § 962(a)(3), substituted “paragraph (1) or (2) of section 104(a)” for “section 104(a)(2)”. 1988—Subsec. (c). Pub. L. 100–647, in par. (2), redesignated subpars. (D) and (E) as (C) and (D), respectively, struck out former subpar. (C) which provided that the assignee does not provide to the recipient of such payments rights against the assignee which are greater than those of a general creditor, and as concluding provisions, inserted at end “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.” 1986—Subsec. (c). Pub. L. 99–514 inserted “(in a case involving physical injury or physical sickness)”.

Statutory Notes and Related Subsidiaries

Effective Date of 1997 AmendmentPub. L. 105–34, title IX, § 962(b), Aug. 5, 1997, 111 Stat. 892, provided that: “The amendments made by subsection (a) [amending this section] shall apply to claims under workmen’s compensation acts filed after the date of the enactment of this Act [Aug. 5, 1997].”

Effective Date of 1988 AmendmentPub. L. 100–647, title VI, § 6079(b)(2), Nov. 10, 1988, 102 Stat. 3710, provided that: “The amendment made by paragraph (1) [amending this section] shall apply to assignments after the date of the enactment of this Act [Nov. 10, 1988].”

Effective Date of 1986 AmendmentPub. L. 99–514, title X, § 1002(b), Oct. 22, 1986, 100 Stat. 2388, provided that: “The amendment made by this section [amending this section] shall apply to assignments entered into after December 31, 1986, in taxable years ending after such date.”

Effective DatePub. L. 97–473, title I, § 101(c), Jan. 14, 1983, 96 Stat. 2606, provided that: “The amendments made by this section [enacting this section and amending section 104 of this title] shall apply to taxable years ending after December 31, 1982.”