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attorney $40,000 to represent it in the above-described
proceedings.
OPINION
Are Petitioners Required To Include in Gross Income the Amounts
Received From the Sale of the Building?
Respondent contends that petitioners diverted $272,100
($136,550 and $135,550) from Magna Carta through the trust to
themselves and that those amounts are taxable to them.
Respondent sees this as nothing more or less than the “income
from whatever source” referenced in section 61(a). See also
North American Oil Consol. v. Burnet, 286 U.S. 417 (1932).
Conversely, petitioners contend that these amounts are simply
inheritances from their father’s estate planning trust and are
excluded from gross income in accord with section 102(a).
Petitioners base their contention on the premise that Victor had
lent money to Magna Carta and the proceeds of the sale of the
building were merely repayment of amounts owed Victor.
Respondent argues that petitioners are collaterally estopped from
asserting that Magna Carta owed Victor any portion of the
proceeds of the sale of the building or that they are entitled to
any portion of the $272,100 from the estate of Victor, the trust,
or Magna Carta. We agree with respondent.
Once a factual finding or holding is “actually and
necessarily determined by a court of competent jurisdiction, that
determination is conclusive in subsequent suits based on a
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