Andrew S. and Linda Hayworth Brenner - Page 19

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          prepared sometime in 1997, could not have contained more than a             
          fraction of the $600,000 estimated total legal fees as the final            
          amount was not known until all of the various legal proceedings             
          had been completed in late 1998.                                            
               Mr. Maitland testified, and we have found, that (1) he and             
          petitioner did not discuss how the settlement payment would be              
          allocated among the claims made by petitioner, and (2) he did not           
          intend any part of the settlement payment to be for any                     
          particular claim that petitioner had made.                                  
               Pursuant to the settlement agreement, Nomura made the                  
          settlement payment and petitioner released Nomura from liability            
          for all existing claims, including any claim for present or                 
          future legal expenses.  To enter into the settlement agreement,             
          Mr. Maitland and, by him, Nomura did not require of petitioner              
          any accounting from him of his legal expenses.  Nomura did not              
          attempt to enforce any substantiation requirement that may have             
          been implicit in Article XIII.  More importantly, petitioner did            
          not substantiate his legal expenses to Nomura in any sense other            
          than, perhaps, telling Mr. Maitland that his claim was based in             
          part on legal expenses of $600,000.  Even if that did occur, it             
          is not an accounting sufficient to satisfy section 1.62-2(e)(3),            
          Income Tax Regs.                                                            

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