Wallace R. Noel and Robinette Noel - Page 18

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          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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