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the defamation agreement was a cash equivalent--i.e., that it was
assignable or contained a promise to pay that was frequently
transferred to lenders or investors at not substantially greater
than the generally prevailing premium for the use of money.
Cowden v. Commissioner, 289 F.2d 20 (5th Cir. 1961), revg. 32
T.C. 853 (1959). We also note that UTA was unwilling to pay the
entire $4 million as a lump sum “up front”. See Jombo v.
Commissioner, T.C. Memo. 2002-273.
2. Constitutionality of Section 104
Petitioner’s second argument is that post-SBJPA section 104
is unconstitutional because it is retroactive and violates due
process.
Post-SBJPA section 104 is not retroactive. Venable v.
Commissioner, T.C. Memo. 2003-240 n.1. SBJPA section 1605(d)(1)
provides that the amendments made by SBJPA section 1605 shall
apply to amounts received after the date of the enactment of the
SBJPA, in taxable years ending after such date. SBJPA section
1605(d)(2) provided an exception to this rule for amounts
received under a written binding agreement, court decree, or
mediation award in effect (or issued on or before) September 13,
1995. Accordingly, post-SBJPA section 104 applies only to
amounts received after its effective date; it does not affect the
29(...continued)
the settlement agreements.
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