Raymond Albert Moorefield - Page 6

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          taxpayer receives money under a claim of right and without                  
          restriction as to its disposition, he has received taxable income           
          in the year of receipt, even if he is under a contingent                    
          obligation to return it.  See N. Am. Oil Consol. v. Burnet, 286             
          U.S. 417, 424 (1932); Nordberg v. Commissioner, 79 T.C. 655, 664-           
          665 (1982), affd. without published opinion 720 F.2d 658 (1st               
          Cir. 1983); Hope v. Commissioner, 55 T.C. 1020, 1030 (1971),                
          affd. 471 F.2d 738 (3d Cir. 1973).  The taxpayer cannot postpone            
          reporting of the income until a final determination is made                 
          concerning his entitlement to the disputed amounts.  Estate of              
          Etoll v. Commissioner, 79 T.C. 676, 679 (1982).                             
               To avoid the application of the claim of right doctrine,               
          petitioner must at least have recognized in the year of receipt             
          “an existing and fixed obligation to repay the amount received”             
          and made provision for repayment.  Nordberg v. Commissioner,                
          supra at 665 (quoting Hope v. Commissioner, 55 T.C. at 1030).               
          Here, petitioner has never, so far as the record reflects,                  
          recognized an obligation to repay the amounts that he received in           
          1988.  Apparently, he merely wishes to retain the right to claim            
          that he is entitled to more money from Wright.                              
               Petitioner did return and thereafter refused to accept                 
          $45,000 of the proceeds that he was entitled to under the                   
          settlement agreement.  He apparently did so for strategic                   
          reasons, however, and not because he recognized an obligation to            

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