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Vaughn v. Commissioner, T.C. Memo. 1992-317, affd. without
published opinion 15 F.3d 1095 (9th Cir. 1993).
There was trial testimony regarding the degree of physical
intimidation (if any) petitioner brought to bear against Dr.
Hestir when petitioner discovered the affair and received the
payment of $25,000. We need not resolve those factual disputes
to conclude that the payment was not a gift.
C. Conclusion
We conclude that the $25,000 payment by Dr. Hestir was not
the result of detached and disinterested generosity or paid out
of affection, respect, admiration, or charity. Instead it was
paid to avoid a lawsuit, to avoid public and professional
embarrassment, and to assuage his own feelings of guilt or moral
obligation. Therefore, the $25,000 payment in 1999 is not a gift
and is includable in petitioners’ gross income for that year.
To reflect the foregoing,
Decision will be
entered for respondent.
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