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74 T.C. 1005, 1010-1011 (1980); Kendall v. Commissioner, 31 T.C.
549, 554 (1958); Bymaster v. Commissioner, 20 T.C. 649, 653-654
(1953); Allaben v. Commissioner, 35 B.T.A. 327, 328 (1937); see
also Lapham v. United States, 178 F.2d 994, 996 (2d Cir. 1950).
As this Court has stated, "a lump sum purchase price is not to be
rationalized after the event of sale as representing a
combination of factors which might have been separately stated in
the contract if the parties had seen fit to do so." Bymaster v.
Commissioner, supra at 653-654.
The result is different, however, when the condemnation
award is actually compensation for nonproperty items, such as
interest or a waiver of legal rights. The fact that an award
includes compensation for nonproperty rights may be evidenced by
the award's being significantly in excess of the value of the
property taken. In such a case, the Court has allocated part of
the award to the nonproperty interests. See Smith v.
Commissioner, 59 T.C. 107 (1972); see also Estate of Walter v.
Commissioner, T.C. Memo. 1971-244.
The primary argument in respondent's brief is that MIC is
taxable on $1,017,500 (rather than $1,162,215 as shown in the
notice of deficiency) of the condemnation award because the award
included damages for going concern value and certain covenants.
Respondent states that this amount is taxable to MIC because MIC
was the party that actually received and used the proceeds from
the award. Respondent does not contest that $820,000 of the
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