Markwardt v. Commissioner
United States Tax Court
1. The petitioners purchased all of the stock in T-M Corp. from H. They claimed that as part of the sale, H orally promised not to compete with the business of T-M, but later he did compete and denied making any such promise. The alleged covenant was later found to be unenforceable under State law.
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1. The petitioners purchased all of the stock in T-M Corp. from H. They claimed that as part of the sale, H orally promised not to compete with the business of T-M, but later he did compete and denied making any such promise. The alleged covenant was later found to be unenforceable under State law. Held, the alleged covenant would be an asset of T-M, and not the petitioners, so that any loss sustained when the covenant became worthless was not incurred by the petitioners. 2. In their brief, the petitioners for the first time contend that they incurred a theft loss when they purchased the…
1Opinion of the Court
Simpson, Judge:
The Commissioner determined the following deficiencies in the petitioners’ Federal income tax:
Year Deficiency Year Deficiency
1965 _ $8,654.42 1967 $39.47
1966 _ 2,150.51 1968 12,105.09
We must decide whether the petitioners sustained a loss as the result of the worthlessness of an alleged covenant not to compete.
FINDINGS OF FACT
Some of Ihe facts have been stipulated, and those facts are so found.
The petitioners, Edwin E. and Odella G. Markwardt, are husband and wife, who resided in Grand Prairie, Tex., at the time of filing their petition herein. They filed their joint Federal…
2Cases cited25 opinions
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