Daniel E. and Karen A. Harkins - Page 17

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          after the close of the 1996 taxable year, the period reserved to            
          Pepsi for making payment of the marketing funds for the second              
          half of 1996, the theater company would have been forced to                 
          forfeit the marketing funds for the last half of 1996 and to                
          repay the marketing funds for the first half of 1996.                       
          Petitioners therefore contend that the theater company's right to           
          the marketing funds remained contingent even after the close of             
          the taxable year.  Petitioners base their contention on the                 
          provision in the agreement labeled “Marketing Fund”:                        
               Should the Customer fail to comply with any of the                     
               Performance Requirements during the Term, the Customer                 
               agrees that in addition to the forfeiture of any                       
               funding for the second 6-month period, the Customer                    
               shall immediately repay to Pepsi-Cola all of the funds                 
               paid to the Customer, by Pepsi-Cola, for the first 6-                  
               month period of that Year.  [Emphasis added.]                          
               As previously stated, however, we do not look to conditions            
          subsequent in applying the all events test.  See Keith v.                   
          Commissioner, 115 T.C. at 617.  We therefore sustain respondent's           
          determination that the marketing funds paid in 1997 should have             
          been accrued in 1996.                                                       
               To the extent not herein discussed, we have considered the             
          parties' other arguments but found them to be moot, irrelevant,             
          or unconvincing.                                                            

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