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In a recent opinion, the Court of Appeals for the Eleventh
Circuit followed the Cotnam holding that the contingent legal
fees in Alabama are not includable in a taxpayer’s gross income
as part of the taxpayer’s lawsuit recovery. See Davis v.
Commissioner, supra. In that case, the Court of Appeals
considered respondent’s above-described alternative argument and
rejected it for lack of proof that the “values of the properties
exchanged” were sufficiently “unascertainable” to bring the open
transaction doctrine into play. See id. at 1348. Likewise, the
evidence in this case is insufficient to reach the question of
whether respondent’s alternative theory would change the result.
Cf. id. at 1348 n.5.
The Court of Appeals for the Fifth Circuit’s holding in
Cotnam, as followed in Davis v. Commissioner, supra, applies in
this case under the Golsen rule because petitioner’s appeal of
our decision would be to the Court of Appeals for the Eleventh
Circuit. In that regard, decisions of the Court of Appeals for
the Fifth Circuit prior to September 30, 1981, are binding
precedent in the Court of Appeals for the Eleventh Circuit. See
Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir. 1981).
That being the case, we hold for petitioner on this issue in
accord with the holding of the Court of Appeals to which appeal
of our decision would lie. Our longstanding practice, founded in
Golsen v. Commissioner, 54 T.C. 742, 756-757 (1970), affd. 445
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