$9.$ A distraught client asks your advice in a dispute over income that she believes should not be taxable. She explains that in $2004$ she received a lump$-$sum amount of $$40,500,$ for which a contingent obligation to repay this sum was attached. She believes that there is no liability on her part, even though the opposite party prepared preliminary paperwork demonstrating that fixed payments for the lump$-$sum amount were due.

Must the lump$-$sum amount of $$40,500$ be included as income in the taxable year $2004?$ Why?