- 22 - Commissioner, 76 T.C. 239 (1981). Furthermore, the fact that the Mr. Wright's right to receive $225,000 per year for consulting was absolute and unconditional indicates that the payment was not, in substance, for consulting services. See Coven v. Commissioner, 66 T.C. 295, 304 (1976). There was no meaningful evidence of the negotiations which resulted in the allocation of the amounts set forth in the consulting agreement. Thus, we examine events subsequent to the execution of the agreement to determine whether the allocation had independent economic significance. The minimal number of consultations subsequently provided by Mr. Wright, coupled with the paucity of evidence regarding the nature, scope, and value of such services, indicates that the allocation of $675,000 did not have an arguable relationship with business reality. However, we recognize that a reasonable person in the position of the buyers would pay some consideration for a consulting agreement with Mr. Wright. On this record, we find that the consulting agreement had a value of $1,200. Consequently, only $1,200 of the amount allocated to the consulting agreement is properly allocable thereto. Seaboard Fin. Co. v. Commissioner, 367 F.2d 646, 652 (9th Cir. 1966); Peterson Machine Tool, Inc. v. Commissioner, 79 T.C. 72, 86 (1982), affd. 54 AFTR 2d 84-5407, 84-2 USTC par. 9885 (10th Cir. 1984); cf. Concord Control, Inc. v. Commissioner, 78 T.C. 742 (1982). Accordingly, petitioner may claim deductionsPage: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
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