Walter E. Hess and Helen L. Hess - Page 15

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          contrast with petitioner's argument that Balfour paid him the               
          settlement as compensation for a personal injury, we find that              
          Balfour's dominant reason for paying the settlement was to                  
          compensate petitioner for commissions which Balfour could be                
          called upon to pay him in the event he prevailed in the District            
          Court suit.                                                                 
               Petitioner focuses only on the settlement agreement and asks           
          the Court to do likewise.  We decline to do so.  In Robinson v.             
          Commissioner, supra, the taxpayers sued a State bank for failing            
          to release a lien on their property.  After the jury returned a             
          verdict in their favor for approximately $60 million, including             
          $6 million for lost profits, $1.5 million for mental anguish, and           
          $50 million in punitive damages, the parties to that proceeding             
          settled.  In the final judgment reflecting the settlement, which            
          was drafted by the parties and signed by the trial judge,                   
          95 percent of the settlement proceeds was allocated to mental               
          anguish and 5 percent was allocated to lost profits.  We held               
          that this allocation did not control the taxability of the                  
          proceeds to the taxpayers.  We noted that the allocation was                
          "uncontested, nonadversarial, and entirely tax motivated", and              
          that it did not accurately "reflect the realities of * * * [the             
          parties'] settlement."  Id. at 129.                                         

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