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have remained unsatisfied for an indefinite period of time. In
accord with the note and the terms of an accompanying agreement,
Krieger was paid $429,594.49 during the first 5 years after the
settlement ($56,409.11, $110,317.07, $130,739.49, $75,636.22, and
$56,492.60 for the years 1991, 1992, 1993, 1994, and 1995,
respectively).
Accordingly, although it was agreed that Krieger was
entitled to $1.5 million, there was no assurance that the bingo
operation would generate income sufficient to satisfy the note.
The conditional nature of the note and its indefinite term
prevent the all events test from being satisfied. See, e.g.,
Restore, Inc. v. Commissioner, T.C. Memo. 1997-571, affd. per
curiam 174 F.3d 203 (11th Cir. 1999). Even if these
circumstances did facially comply with the all events test, the
allowance of a $1.5 million deduction for November’s 1991 year
when payments on the note are conditional and extend over an
indefinite period of time would result in a distortion and fail
to match November’s income and deductions. Cf. Ford Motor Co. v.
Commissioner, 102 T.C. 87 (1994), affd. 71 F.3d 209 (6th Cir.
1995).
Accordingly, we hold that November was not entitled to
deduct $1.5 million for legal fees for its 1991 year, but that it
is entitled to deduct the payments to Krieger in the year of each
payment.
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