Harold Levinson Associates, Inc. - Page 10

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          would have the right to purchase stock "from the company", and              
          the fact that no issue has been raised by either party in that              
          connection, we address the issue as though the stock of                     
          petitioner is involved just as the parties themselves have done.            
               Petitioner contends that the settlement amount represents              
          lost compensation deductible under section 162(a).  According to            
          petitioner, Goldman saw the stock as a symbol of the accompanying           
          employment contract and compensation it entailed.  Petitioner               
          asserts that since petitioner is a closely-held corporation and             
          does not pay dividends, Goldman wanted the stock only to the                
          extent it would provide compensation.  Correspondingly,                     
          petitioner argues, petitioner would have been entitled to a                 
          compensation deduction for any amounts paid to Goldman.                     
          Petitioner characterizes Goldman in its brief as an employee                
          seeking lost compensation analogous to back pay.                            
               The flaw in this argument is its assumption that Goldman was           
          an employee of petitioner.  Petitioner stipulated that Goldman              
          was never employed by petitioner.  The record does not articulate           
          Goldman's intentions.  It seems a reasonable inference that                 
          Goldman pursued the stock sale because the stock represented not            
          only future earnings, as petitioner alleges, but also control.              
          Had he been able to purchase the stock, Goldman would have owned            
          a significant minority of the corporation.  Such control,                   
          arguably, may have been his goal.  Whatever his intentions, it is           





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