- 40 -
proceeds of the Farmers lawsuit to DCI and to the Diamonds as the
owners of ETS:
Amount Amount
Item Awarded Awarded to
Awarded to DCI the Diamonds
Punitive damages $237,485 $53,230
Attorneys' fees
and costs 184,792 41,420
Interest 145,311 32,570
Based on our review of the entire record in this case, we
find that, of the proceeds of the Farmers lawsuit that are at
issue (viz., $2,191,824), $1,790,536 was awarded to DCI and
$401,288 was awarded to the Diamonds as the owners of ETS.
Accordingly, only $1,790,536 of those proceeds is includible in
DCI's gross income for the year at issue.31
To reflect the foregoing and the concessions of the parties,
Decision will be entered
under Rule 155.
31 The remaining portion of such proceeds, or $401,288, is not
includible in DCI's gross income for the year at issue, and DCI
is not entitled to the deduction of $411,086 on which the parties
focus their arguments. In this connection, petitioner concedes
on brief that, by allowing petitioner to deduct $39,159 of the
total deduction claimed in its return for the year at issue with
respect to the proceeds of the Farmers lawsuit, respondent did
not include in petitioner's taxable income for that year $39,159
of those proceeds that are at issue and that the District Court
awarded to the Diamonds as the owners of ETS. Consequently, in
the Rule 155 computation, the parties shall take account of
petitioner's concession so that the maximum amount of the pro-
ceeds of the Farmers lawsuit that are at issue and that are not
includible in the taxable income of DCI is $401,288.
Page: Previous 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Last modified: May 25, 2011