Douglas J. And Marguerite H. Lemery, and Raymond J. And Myrtle Lemery v. Commissioner of Internal Revenue

This appeal from a judgment of the Tax Court involves federal income taxes for the year 1960. The findings of fact and opinion of the Tax Court are reported at 52 T.C. 367 (1969). We affirm.

In a contract of purchase and sale of three corporations which owned two motels, a laundry and a cocktail lounge, the seller, a Canadian citizen, gave a covenant not to compete within the Portland, Oregon area for five years. The taxpayer-appellants agreed that, of the purchase price of $1,131,000, the sum of $200,000 was to apply to the covenant. Thereafter, the buyers, appellants herein, attempted to…