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the rights afforded by paragraph 4.0 inured to decedent’s parents
only as her “co-conservators”.
The Court would also make a final observation in connection
with the testimonial record. It is well settled that when a
settlement agreement fails to designate the reason for a payment,
the intent of the payor in making the payment controls for tax
purposes. See, e.g., Francisco v. United States, 267 F.3d 303,
319 (3d Cir. 2001); Knuckles v. Commissioner, 349 F.2d 610, 613
(10th Cir. 1965), affg. T.C. Memo. 1964-33; Metzger v.
Commissioner, 88 T.C. 834, 847-848 (1987), affd. without
published opinion 845 F.2d 1013 (3d Cir. 1988); Reisman v.
Commissioner, T.C. Memo. 2000-173, affd. 3 Fed. Appx. 374 (6th
Cir. 2001). Yet the estate did not call as a witness any of the
defendants in the underlying lawsuit. Suffice it to say that the
silence of the record in this regard speaks loudly. See, e.g.,
Wichita Terminal Elevator Co. v. Commissioner, 6 T.C. 1158, 1165
(1946), affd. 162 F.2d 513 (10th Cir. 1947).
In support of their respective positions, both sides rely
primarily on a single case. The estate analogizes from Kegel v.
State, 830 P.2d 563 (N.M. Ct. App. 1992), while respondent draws
our attention to Arrington v. United States, 34 Fed. Cl. 144
(1995). Kegel v. State, supra at 564, involved a settlement
agreement resulting from a malpractice lawsuit brought by a
disabled minor child and his parents. The settlement agreement
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