Estate of Kevin J. Lorenz, Deceased, Elizabeth J. Lorenz, Personal Representative and Elizabeth J. Lorenz - Page 14

                                                - 14 -                                                  
            record.  Petitioners also contend that these amounts of                                     
            additional depreciation are properly allowable under the law.                               
                  Respondent contends that the basis of settlement stated for                           
            the record was complete.  Respondent also contends that the                                 
            amounts of additional depreciation claimed by Comet are not                                 
            correct and that respondent did not agree to those amounts.                                 
                  We are not convinced that mutual mistake is present in these                          
            cases because both parties said that the basis of settlement                                
            represented the full settlement agreement.  The basis of                                    
            settlement used the amount of gross income for Comet as                                     
            determined by respondent as a starting point.  If respondent had                            
            agreed to make any additional concessions, petitioners' counsel                             
            should have identified them to the Court when the settlement was                            
            presented.  See Stamm Intl. Corp. v. Commissioner, supra; Korangy                           
            v. Commissioner, T.C. Memo. 1989-2, affd. 893 F.2d 69 (4th Cir.                             
            1990).  The parties are bound by the basis of settlement as                                 
            stated on the record and may not rely on extrinsic evidence to                              
            prove that they had agreed to something else.  Woods v.                                     
            Commissioner, 92 T.C. 776, 780-781 (1989); Constitution Publg.                              
            Co. v. Commissioner, 22 B.T.A. 426, 427-428 (1931).                                         
                  We conclude that Comet is not entitled to deduct more for                             
            depreciation than respondent allowed.                                                       
                  For the foregoing reasons,                                                            

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  Next

Last modified: May 25, 2011