- 18 -
Commissioner, supra at 640. The record does not contain a great
deal of evidence to help this Court in making an allocation. As
we stated in Eisler v. Commissioner, supra at 641, under these
circumstances, "the most that can be expected of us is the
exercise of our best judgment based upon the entire record."
Therefore, we conclude that, of the $886,383 in settlement pro-
ceeds apportionable to the release of petitioner's claims in
contract and in tort, one-third was paid to settle the tort
claim. Accordingly, one-third of the $886,383, or $295,461, is
excludable under section 104(a)(2).
Basis of Petitioner's PMI Stock
In his 1990 Federal income tax return, petitioner included
the following amounts in the basis of his PMI stock: $100,000 of
miscellaneous expenses, $5,797 in additional travel costs, $1,637
in miscellaneous legal fees, and $800,000 in legal costs related
to the PepsiCo litigation ($300,000 actually paid and $500,000 in
contingent fees; see supra p. 8 table note 2). Respondent, in
her notice of deficiency, determined that none of these amounts
should have been included in petitioner's PMI stock basis. We
will deal with each of these items in turn.
The Commissioner's determinations are presumed correct.
Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Peti-
tioner has the burden of establishing the correct basis of his
PMI stock. Burnet v. Houston, 283 U.S. 223, 228 (1931).
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