-24--24-
1490 (9th Cir. 1990), revg. 91 T.C. 160 (1988) (quoting Tribune
Pub. Co. v. United States, 836 F.2d 1176, 1177 (9th Cir. 1988)).
In characterizing the settlement payment for tax purposes, we
ask: “‘In lieu of what were the damages awarded?’” Tribune Pub.
Co. v. United States, supra (quoting Raytheon Prod. Corp. v.
Commissioner, 144 F.2d 110, 113 (1st Cir. 1944), affg. 1 T.C. 952
(1943)).
Petitioners have focused on the purpose referred to in the
settlement agreement (“settling disputed claims involving the
restoration of lost franchise value”) as the basis of their
argument that the damages were for injury to goodwill. While the
stated purpose of the settlement agreement is to be considered,
courts “employ a broad approach in determining the true nature
and basis of a party’s claim.” Getty v. Commissioner, supra at
1491.
The parties in these cases have introduced several items of
evidence to show the true nature of the claim involved. The
notice of claim filed by the Raiders with Oakland states: “the
plaintiff [Oakland] has denied to defendant Raiders the free and
untrammeled possession and use of the property sought to be
condemned, viz, Raiders’ franchise in the National Football
League and has thereby itself preempted Raiders’ full possessory
rights”. The notice of claim enumerated the ways in which
Oakland had caused the Raiders to suffer damages, including lost
revenue and increased expense.
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