Cohen v. Kelm

NORDBYE, Chief Judge.

Two questions are presented: (1) Is a sole proprietorship of a business, such as a retail store, a capital asset so that a gain on its sale is a capital gain; and (2) if such a sole proprietorship is not a capital asset, how is it determined what part of the purchase price is attributable to good-will, good-will being a capital asset?

■ Cohen, the taxpayer, operated a retail clothing store at Ladysmith, Wisconsin, for some 23 years until March 16, 1946, when he sold the business to one I. Blustin. No complete inventory was made immediately prior to the sale, but Blustin,…