Monaghan v. Commissioner
United States Tax Court
The seller of a going proprietorship package goods liquor store received a sum in payment for the inventory and an amount in payment for the remainder of the assets. A covenant not to compete was contained in the sale agreement. Held, the covenant not to compete did not have a separate value apart from the other assets. Held, further, the sellers could properly report the amount received for the noninventory assets under the installment sales provisions.
1Opinion of the Court
ForresteR, Judge:
The respondent has determined a deficiency of $31,199.74 in petitioners’ income tax for the calendar year 1958. The sole remaining issues are: (1) The separate value, if any, of a covenant not to compete; and (2) the propriety of petitioners reporting under section 453 1 gain from the sale of certain assets of a going proprietorship package goods liquor business.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
Petitioners were husband and wife and resided in Island Heights, N.J., at all times material hereto. They filed a joint cash basis income tax…
2Cases cited5 opinions
- Michaels v. CommissionerUnited States Tax Court · 1949
- Watson v. CommissionerSupreme Court of the United States · 1953
- Williams v. McGowanCourt of Appeals for the Second Circuit · 1945
- Brooks v. CommissionerUnited States Tax Court · 1961
- Watson v. CommissionerUnited States Tax Court · 1950
3Cited by17 opinions
- Raich v. CommissionerUnited States Tax Court · 1966
- Turner v. CommissionerUnited States Tax Court · 1967
- Berger v. CommissionerUnited States Tax Court · 1996
- Irwin v. CommissionerUnited States Tax Court · 1966
- Deseret Management Corporation v. United StatesUnited States Court of Federal Claims · 2013
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