Howard Constr., Inc. v. Commissioner
United States Tax Court
Investors Loan Corp. acquired all the stock of Colonial Loan Co., which owned all the stock of two other small loan companies, for a price of $ 16.60 per share. The agreement of sale also included a covenant not to complete, inserted after the price negotiations were completed. Held: No part of the amounts paid by Investors to the stockholders of Colonial for their stock is allocable to the covenant not to compete. Entire profit of sellers was capital gain.
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Investors Loan Corp. acquired all the stock of Colonial Loan Co., which owned all the stock of two other small loan companies, for a price of $ 16.60 per share. The agreement of sale also included a covenant not to complete, inserted after the price negotiations were completed. Held: No part of the amounts paid by Investors to the stockholders of Colonial for their stock is allocable to the covenant not to compete. Entire profit of sellers was capital gain. Buyer not entitled to deduct any part of the purchase price paid as amortization of amounts paid for covenant not to compete, or, in the…
1Opinion of the Court
DeeNNEN, Judge:
In these consolidated proceedings respondent determined deficiencies in income tax as follows:
Docket No.
Petitioner
Year
Deficiency
93034 Howard Construction, Inc.-. 1957.. 1 $1, 938.19
93035 George Floyd Jones, Jr., and Mary Rose Jones_ 1957. 493.68
93036 George Floyd Jones, Sr., and Esther G. Jones_ 1957... 477.93
93116 Glenn L. Squires and Ann Louise Squires. 1957. 2,751.12
93172 Joseph S. Farland and Virginia C. Farland... 1957.. 12,126.21
94403 Howard Construction, Inc.... Taxable year ended Mar. 31,1958. 1 1,938.19
738-63 Investors Loan Corp
[Taxable year ended:
Sept. 30, 1958.
Sept.…
2Cases cited11 opinions
- Hamlin's Trust v. Commissioner of Internal Revenue. Nowel's Estate v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1954
- Michaels v. CommissionerUnited States Tax Court · 1949
- Annabelle Candy Co. v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1962
- Horton v. CommissionerUnited States Tax Court · 1949
- Commissioner of Internal Revenue v. Gazette Tel. Co.Court of Appeals for the Tenth Circuit · 1954
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3Cited by24 opinions
- Lemery v. CommissionerUnited States Tax Court · 1969
- Levinson v. CommissionerUnited States Tax Court · 1966
- James A. Patterson and Dorothy A. Patterson v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1987
- Kinney v. CommissionerUnited States Tax Court · 1972
- Lutz v. CommissionerUnited States Tax Court · 1966
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