Peterson Machine Tool, Inc. v. Commissioner
United States Tax Court
Buyer purchased the stock of KI from sellers. The contract of sale provided that the purchase price was paid for all of the stock of KIand for covenants not to compete. It further provided that the covenants were "materially significant and essential to the closing" and that the "covenants are a material portion of the purchase price."
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Buyer purchased the stock of KI from sellers. The contract of sale provided that the purchase price was paid for all of the stock of KIand for covenants not to compete. It further provided that the covenants were "materially significant and essential to the closing" and that the "covenants are a material portion of the purchase price." Held, "strong proof" doctrine not applicable where neither party seeks to vary the terms of the contract, but only to construe obviously ambiguous terms in light most favorable to their respective causes. Held, further, covenants not to compete were intended to…
1Opinion of the Court
Forrester, Judge'.
In these consolidated cases, respondent has determined deficiencies in petitioners’ Federal income taxes as follows:
Petitioner Docket No. Year ending Deficiency
Peterson Machine Tool, Inc., and its subsidiary, Kansas Instruments, Inc. 8607-80 8/31/76 8/31/77 $22,997.00 11,154.00
Carl U. Hansen and Merida Hansen 8982-80 12/31/75 17,950.00
M. V. Welch and Lucy L. Welch 8980-80 12/31/75 3,140.65
Robert W. Moses and Dixie L. Moses 8981-80 12/31/75 2,515.00
Concessions having been made, the only issue remaining for decision is whether any portion of the sale price of all of the…
2Cases cited12 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Cohan v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1930
- Hamlin's Trust v. Commissioner of Internal Revenue. Nowel's Estate v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1954
- Annabelle Candy Co. v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1962
- Major v. CommissionerUnited States Tax Court · 1981
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- Gene L. Kreider and Estate of Berniece L. Kreider, Deceased, Gene L. Kreider v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1985
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