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T.C. Memo. 1960-78, is misplaced.8 The taxpayer in Cold Metal
Process Co. was on the accrual method of accounting, and any
precedents established by that case simply have no application to
the issue in dispute here. In each of the other cases there was
a question regarding whether the taxpayer was entitled to receive
the disputed income. Unlike the taxpayers in those cases,
petitioner was clearly entitled to the reward in 1999; the only
question at the time was how much of the reward she would be
entitled to retain.
The reward is includable in petitioner’s 1999 income, and
respondent’s adjustment to that end is sustained. We need not
discuss the treatment of the $1,299 interest earned on the reward
proceeds while they were on deposit in the trust fund because the
parties have agreed on that treatment. Finally, as noted above,
respondent now agrees that petitioner is entitled to a
miscellaneous itemized deduction in an amount equal to the amount
includable in her income, and petitioner agrees that the
imposition of the section 55 alternative minimum tax that results
is computational.
8 Stone v. Commissioner, T.C. Memo. 1984-187, might very
well apply to the interest earned on the reward proceeds while
they were on deposit in the trust account. However, the parties
have by their agreement removed the treatment of the interest
from the Court’s consideration.
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Last modified: November 10, 2007