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means that such guaranteed payment must be excluded. We
disagree.
We find petitioners' arguments to be an incorrect reading of
the Closing Agreement. Form 906 binds the parties only to
specific matters agreed upon. Zaentz v. Commissioner, supra at
761. As we read the Closing Agreement, the parties agreed to
settle with respect to petitioners' taxable income, gains, and
losses from their interest in Federal. Nowhere in the Closing
Agreement is there a provision excluding the $20,000 guaranteed
payment. In fact, the parties stipulated that the treatment to
be accorded to guaranteed payments was not expressly discussed by
either party during the settlement negotiations. We reiterate
what we stated in Janow I. The definition of a "guaranteed
payment" to a partner supports this interpretation of the Closing
Agreement. A guaranteed payment is a payment made by a
partnership to a partner for services or for the use of capital
and is considered as made to one who is not a partner, to the
extent such payment is determined without regard to the income of
the partnership. Sec. 707(c); sec. 1.707-1(c), Income Tax Regs.
For the purposes of sections 61(a) and 162(a), guaranteed
payments are not considered part of a partner's distributive
share of partnership income. Pursuant to section 707, a partner
shall include in his income for a taxable year guaranteed
payments which are made to him in a partnership taxable year
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