- 20 -                                         
          Return Positions                                                            
               On its return for the fiscal year ended November 30, 1994,             
          Indeck claimed an interest expense deduction of $4,856,922; i.e.,           
          equal to the (rounded) total of Component (ii) ($4,809,600) and             
          Component (iii) ($47,321.85) as described in the Settlement                 
          Agreement.  The Polskys, on the other hand, reported the entire             
          $19,886,922 settlement payment as proceeds from the sale of Mr.             
          Polsky’s Indeck shares on their 1994 return as amended.  Indeck             
          did not issue a Form 1099-INT, Interest Income, to Mr. Polsky               
          with respect to any portion of the settlement payment made                  
          pursuant to the Settlement Agreement.                                       
          Notices of Deficiency                                                       
               To prevent a “whipsaw” with respect to the proper tax                  
          treatment of the settlement payment, respondent issued                      
          inconsistent notices of deficiency to the petitioners herein.6              
          In Indeck’s notice, issued on August 13, 1997, after an                     
          examination, respondent determined that Indeck was not entitled             
          to an interest deduction claimed with respect to $4,856,9227 of             
               6 Respondent is entitled to defend against inconsistent                
          results by issuing inconsistent determinations, see Maggie Mgmt.            
          Co. v. Commissioner, 108 T.C. 430, 446 (1997), and each                     
          determination is entitled to the same presumption of correctness            
          as if it had been issued separately, see Doggett v. Commissioner,           
          66 T.C. 101, 103 (1976); Ryan v. Commissioner, T.C. Memo. 1998-             
          331.                                                                        
               7 The notice of deficiency issued to Indeck disallowed an              
          interest deduction of $4,856,921, while the notice issued to the            
                                                             (continued...)           
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