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faith. See Bagley v. Commissioner, 105 T.C. at 406; Robinson v.
Commissioner, 102 T.C. 116, 133-134 (1994), affd. on this issue
70 F.3d 34 (5th Cir. 1995); Burditt v. Commissioner, T.C. Memo.
1999-117. However, an express allocation is not necessarily
determinative if other facts indicate that the payment was
intended by the parties to be for a different purpose. See
Bagley v. Commissioner, supra at 406.
We are satisfied that Okabena intended the lump-sum payments
to compensate petitioner for his personal injury claims. Okabena
recognized that petitioner had bona fide claims for defamation
and age discrimination at the time of the settlement agreement
and agreed to make the lump-sum payments “on account of”
petitioner’s personal injuries. When Mr. Dayton was asked at
trial whether petitioner’s personal injuries were of concern to
Okabena at the time the settlement was made, Mr. Dayton
responded: “To a certain degree. Yes.” When Mr. Dayton was
asked, “And why was that concern to the company?”, he responded:
“Well, I think we were concerned about Ron’s well-being, at that
point. He has – was a long-time employee of Okabena. But the
overriding factor was that we were just trying to agree – to
reach an agreeable settlement between both parties.” Before
finalizing the settlement agreement, Okabena evaluated
petitioner’s defamation and discrimination claims and certainly
was aware of petitioner’s allegations that his reputation and his
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