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413 (1940). Petitioners did not pay any cash to settle the
threatened lawsuit. Thus, petitioners must prove how much they
paid in 1994 in the equivalent of cash to settle the threatened
lawsuit. See Rule 142(a).
2. Whether Petitioners Paid $37,739 in 1994 To Settle the
Threatened Lawsuit
Petitioners contend that the amount that petitioner paid to
settle the threatened lawsuit can be derived from the values
stated in the agreement and stipulated values for some of the
provisions of the agreement.2 We disagree. PAYS benefitted from
six provisions in the agreement. There is no stated or
stipulated value for any of those provisions. Petitioner
benefited from nine provisions in the agreement, five of which
have a stated or stipulated value and four of which do not.
Petitioners calculate the value of PAYS’ covenant not to sue
(item 5 under consideration received by petitioner in the chart
below) as follows:
Consideration given by petitioner Amount
1. PAYS stock $92,039
Consideration received by petitioner
1. Forgiveness of debt to PAYS 12,500
2. Release of debts to Henry Steen, Jr., 37,000
and Gates Steen
2 Respondent contends that the settlement consists of two
separate agreements. We disagree. PAYS and petitioner prepared
and executed the settlement at the same time. They signed the
settlement only at the end of page 5. We doubt that they would
have agreed to either part without agreeing to both parts. We
conclude that the settlement is one agreement.
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