Coast Federal issued what it calls contingent payment rights, which pay off in cash.

Where the contract calls for contingent payments, the regulations recognize three possibilities.

The taxpayer then has a basis in the right to contingent payments equal to the amount reported as fair market value.

Arbor will also make a $2.5 million contingent payment if certain earnings targets are met.

In addition, Nuveen said contingent payments that were dependent on significant growth from the combined mutual funds could amount to $20 million over four years.

Coupled with a contingent payment clause, the retainage can cause significant financial distress to a subcontractor.

Any contingent payments, options or commitments.

Second, if there is no maximum selling price, the contingent payments may be subject to a finite duration, e.g., "5% of future profits for ten years."

Gates said that Microsoft favors other solutions in the short-term, but would rely on the contingent payment solution to solve the spam problem over the longer run.

Van Dusen Airport Service Co., 40,000 units (each with a senior subordinated note due in 1997 and one contingent payment obligation).

Generally, the open transaction doctrine will only be used in the rare occurrence where the fair market value of a contingent payment obligation cannot be reasonably ascertained.

Also, the delay of the payment (sometimes as much as five years) reduces the value of the contingent payment due to the effect of time on money.

In that case, the seller reports the fixed amounts (taking original issue discount into account for future fixed payments) plus the fair market value of the right to contingent payments.

The Actuarial Present Value of life contingent payments can be treated as the mathematical expectation of a present value random variable, or calculated through the current payment form.

N.J., said that it had signed an agreement to purchase the business of Playmate Products Inc. for $15 million, with additional contingent payments of up to $6 million through 1993.

On January 18, 2007 Kyphon Inc. (Nasdaq: KYPH) acquired St. Francis for $525 million in cash and additional contingent payments of up to $200 million.

Last week, Integrated said it had agreed to acquire a home care company, First American Health Care of Georgia Inc., for $154 million in cash plus contingent payments of up to $159 million.

Contingent payments are common in some types of installment sales, where, for example, payments are based on the actual rather than the expected profitability of the item sold (typically some percentage of the future profits).

The good news here is that the seller gets a little piece of the open transaction doctrine, and may fully recover basis in the contingent piece of the sale before reporting any additional contingent payments in future years.

In an effort to bridge the difference in positions, the two firms agreed upon including in the terms of the deal a contingent payment on the first anniversary of the transaction that would depend on General Mills' share price.

As these transactions are contingent on payments that occur in the future, and the total selling price cannot be determined as of the end of the taxable year of the sale, they are known as Contingent Payment Sales.

David Van Benschoten, General Mills' treasurer, added that the contingent payment was another example of the "development of the use of [options] in the past 20 years as finance has come to first understand, and work with, the constructs of optionality."

Paramount Denies Profiting Paramount, however, contends that "Coming to America" has not yet generated "sufficient earnings to trigger all of the contingent payments due to various participants, a minor one of which is Mr. Buchwald," said a spokesman for the studio.

The remaining contingent payments were related to the achievement of certain technical, regulatory and commercialization milestones related to the EVRA transdermal contraceptive patch that was being developed with the R.W. Johnson Pharmaceutical Research Institute, a Johnson & Johnson company.

For his work for Global Crossing, Mr. Perle's fee, outlined in papers that the company is preparing to file in as part of a bankruptcy proceeding, is $725,000, including a unusual contingent payment of $600,000 if the company succeeds in obtaining approval to complete the deal.