- 3 -
with the settlement agreement and deposited them into his trust
account. During 1998 and 1999, he issued checks to petitioners
in the amounts of $143,356 and $150,000, respectively. These
payments consisted of the settlement payments net of attorney
fees and costs. Accordingly, petitioners received net settlement
proceeds of $293,356. Petitioners did not report the settlement
proceeds on their 1998 or 1999 Federal income tax returns.
Discussion
The parties stipulated that petitioners may not exclude any
portion of the settlement from gross income under section 104 and
that petitioners* net receipts of $293,356 are includable in
gross income under section 61(a). The sole issue remaining in
dispute is whether that portion of the settlement representing
the attorney*s contingency fee of $206,644 should be included in
petitioners* gross income for their 1998 and 1999 tax years.
Summary judgment is intended to expedite litigation and
avoid unnecessary trials. Fla. Peach Corp. v. Commissioner, 90
T.C. 678, 681 (1988). A motion for summary judgment may be
granted if there is no genuine issue as to any material fact.
See Rule 121(b); Elec. Arts, Inc. v. Commissioner, 118 T.C. 226,
238 (2002). The moving party bears the burden of showing that
there is no genuine issue of material fact, and factual
inferences will be read in a manner most favorable to the party
opposing summary judgment. Bond v. Commissioner, 100 T.C. 32, 36
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