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A payment may not be taxable in the year it is received if,
in that year, the recipient-taxpayer recognizes an unconditional
obligation to pay it to another party. See Bates Motor Transp.
Lines, Inc. v. Commissioner, 200 F.2d 20, 24 (7th Cir. 1952),
affg. 17 T.C. 151 (1951). As another example, amounts paid by a
customer to a taxpayer were not income in the year received to
the extent that the taxpayer acknowledged an obligation to pay
the amounts to the taxpayer’s supplier, even though the agreement
was unenforceable. Lashells’ Estate v. Commissioner, 208 F.2d
430, 435 (6th Cir. 1953), affg. in part, revg. in part and
remanding a Memorandum Opinion of this Court; Shaara v.
Commissioner, T.C. Memo. 1980-247.
Petitioner asserts that Hope v. Commissioner, supra, is
distinguishable because in Hope the taxpayers instituted the
stock sale and then tried to rescind it, while petitioner opposed
the transaction from the beginning. We disagree that this
factual distinction is significant. What we believe is
controlling is that, like the taxpayers in Hope v. Commissioner,
supra, and Miller v. Commissioner, supra, petitioner’s
renunciation of the right to the amount received was not coupled
with an unconditional agreement or understanding with another
party to return the amount received.
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