- 4 -
which they agreed to pay, from their personal funds, to their
father, $104,000 per year. The settlement, in pertinent part,
provided:
5. Ken Schoeneman’s Injuries and Demands. Ken
Schoeneman believes, and has alleged in language required to
bring the matter before the Orphan’s Court, that Dale
Schoeneman and Frank Schoeneman injured him both physically
because of the mental distress visited upon him by virtue of
the inadequate funding of the trusts for which a specific
claim is barred by the statute of limitations, and in his
personal reputation in the community by depriving him of
funds which would have allowed him to live comfortably and
maintain his place in the community and his status therein;
degrading his position and his health over a period of time.
* * *
* * * * * * *
7. Tax Consequences.
(a) It is the intention of the parties to this
Agreement that all payments to Ken Schoeneman pursuant to
Paragraph 6 hereof be considered compensation for the
personal injuries specified in Paragraph 5 and be excluded
from Ken Schoeneman’s gross income for purposes of Federal
income taxation pursuant to 26 U.S.C. �104(a), as amended or
any successor thereto.
(b) It is the intention of the parties to this
Agreement that all payments to Ken Schoeneman pursuant to
Paragraph 6 hereof be considered ordinary and necessary
expenses of Dale Schoeneman and Frank Schoeneman paid for
the conservation, maintenance, preservation and protection
of property held for the production of income and be subject
to deduction by Dale Schoeneman and Frank Schoeneman for
purposes of Federal income taxation pursuant to 26 U.S.C.
�162 and/or �212, as amended; and any successor thereto.
(c) Notwithstanding the statement of intent
specified in subparagraphs 7.(a) and 7.(b) above, the
parties hereto agree the payments to be made to Ken
Schoeneman pursuant to Paragraph 6 shall not be altered in
timing or amount if the intended tax effects are not
realized by Ken Schoeneman and/or Dale Schoeneman and Frank
Schoeneman.
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Last modified: May 25, 2011