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trying to draft a document for the basis of settlement. We find
that, although the agreement does not provide a specific method
of payment on the notes, the parties have stipulated that the
payments were made by the transfer of cattle.
Ordinarily, a stipulation of fact is binding on the parties,
and the Court is constrained to enforce it. Rule 91. The Court
will not permit a party to a stipulation to qualify, change, or
contradict the stipulation except where justice requires. Rule
91(e). The interpretation of a stipulation is determined
primarily by ascertaining the intent of the parties by applying
rules of contract law. Stamos v. Commissioner, 87 T.C. 1451,
1455 (1986).
As we understand petitioner's argument, he claims that the
"cattle" transferred in payment on the notes as stipulated were
not culled cows or calves but were registered shorthorn heifers
and, therefore, not covered by the agreement. Petitioner argues
that there is no gain to be recognized from the transfers because
the Bales decision does not apply to this class of cattle. We
disagree.
Petitioner has stipulated that the cattle transferred had a
zero basis. Thus the transfers result in ordinary income to the
partnerships regardless of whether the cattle are heifers or
culled cows and calves. A stipulation may be set aside where it
is clearly contrary to the facts disclosed on the record. Cal-
Maine Foods, Inc. v. Commissioner, 93 T.C. 181, 195 (1989). The
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