UNITED STATES TAX COURT FRONTIER CHEVROLET CO. v. COMMISSIONER OF INTERNAL REVENUE
United States Tax Court
P entered into a stock sale agreement in which P redeemed 75 percent of its outstanding stock from C in exchange for monetary consideration. P also entered into a noncompetition agreement in which P agreed to make monthly payments to C and S for a period of 5 years so long as C and S agreed not to compete with P. P argues that it is permitted to amortize the noncompetition agreement payments over 60 months, the life of the agreement.
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P entered into a stock sale agreement in which P redeemed 75 percent of its outstanding stock from C in exchange for monetary consideration. P also entered into a noncompetition agreement in which P agreed to make monthly payments to C and S for a period of 5 years so long as C and S agreed not to compete with P. P argues that it is permitted to amortize the noncompetition agreement payments over 60 months, the life of the agreement. HELD: Sec. 197, I.R.C., requires that a covenant not to compete entered into in connection with a direct or indirect acquisition of an interest in a trade or…
1Opinion of the Court
UNITED STATES TAX COURT FRONTIER CHEVROLET CO., Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
UNITED STATES TAX COURT FRONTIER CHEVROLET CO. v. COMMISSIONER OF INTERNAL REVENUE
No. 19627-98
United States Tax Court
116 T.C. 289; 2001 U.S. Tax Ct. LEXIS 22; 116 T.C. No. 23;
May 14, 2001, Filed
Decision will be entered under Rule 155.
P entered into a stock sale agreement in which P redeemed
75 percent of its outstanding stock from C in exchange for
monetary consideration. P also entered into a noncompetition
agreement in which P agreed to make monthly payments to C and S
for a period of 5…
2Cases cited10 opinions
- Consumer Product Safety Commission v. GTE Sylvania, Inc.Supreme Court of the United States · 1980
- Huntsberry v. CommissionerUnited States Tax Court · 1984
- Newark Morning Ledger Co. v. United StatesSupreme Court of the United States · 1993
- Boyle v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1951
- Spencer v. CommissionerUnited States Tax Court · 1998
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