- 16 -
both to purchase his stock and to settle his claims. Accord-
ingly, we must allocate the $3,250,071 between the value of the
stock in PMI and the value of settling petitioner's claims.
It would serve no purpose to delve into detailed discussions
concerning the weight of specific testimony or the credibility of
certain evidence. We make this allocation based on the totality
of the evidence before the Court, while allowing for a certain
amount of overstatement, or understatement, in the assertions
contained in the testimony before us. See Eisler v. Commis-
sioner, 59 T.C. 634 (1973). Therefore, based on the evidence, we
conclude that PepsiCo paid $2,363,688 for the PMI stock, or $6
per share. Consequently, we find that the remainder of the
amount paid to petitioner by PepsiCo, an amount equal to
$886,383, was paid to settle petitioner's claims in contract and
in tort.
To exclude under section 104(a)(2) the proceeds from the
settlement of a claim, the claim (1) must be based on tortlike
rights and (2) must be "on account of" personal injuries. Com-
missioner v. Schleier, 515 U.S. __, 115 S. Ct. 2159 (1995).
Petitioner's first two claims against PepsiCo constitute contract
claims not covered by section 104(a)(2). Petitioner's third
claim is an action in tort. See Maxwell v. Southwest Natl. Bank,
593 F. Supp. 250, 253 (D. Kan. 1984); Turner v. Halliburton Co.,
722 P.2d 1106, 1115 (Kan. 1986). Further, we are satisfied that
petitioner suffered personal injuries. The phrase "on account of
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