UNITED STATES TAX COURT FRONTIER CHEVROLET CO. v. COMMISSIONER OF INTERNAL REVENUE
United States Tax Court
P entered into a stock sale agreement in which P redeemed 75 percent of its outstanding stock from C in exchange for monetary consideration. P also entered into a noncompetition agreement in which P agreed to make monthly payments to C and S for a period of 5 years so long as C and S agreed not to compete with P. P argues that it is permitted to amortize the noncompetition agreement payments over 60 months, the life of the agreement.
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P entered into a stock sale agreement in which P redeemed 75 percent of its outstanding stock from C in exchange for monetary consideration. P also entered into a noncompetition agreement in which P agreed to make monthly payments to C and S for a period of 5 years so long as C and S agreed not to compete with P. P argues that it is permitted to amortize the noncompetition agreement payments over 60 months, the life of the agreement. HELD: Sec. 197, I.R.C., requires that a covenant not to compete entered into in connection with a direct or indirect acquisition of an interest in a trade or…
1Opinion of the Court
OPINION
Ruwe, Judge:
Respondent determined deficiencies in petitioner’s Federal income taxes as follows:
Year Amount
1994 . $28,996
1995 . 135,880
1996 . 110,320
After concessions,1 the issue for decision is whether petitioner must amortize noncompetition agreement payments over 15 years pursuant to section 197.2
Background,
The parties submitted this case fully stipulated. The stipulation of facts, the stipulation of settled issues, and the attached exhibits are incorporated herein by this reference. Petitioner is a corporation that had its principal place of business in Billings, Montana, at the…
2Cases cited9 opinions
- Consumer Product Safety Commission v. GTE Sylvania, Inc.Supreme Court of the United States · 1980
- Huntsberry v. CommissionerUnited States Tax Court · 1984
- Newark Morning Ledger Co. v. United StatesSupreme Court of the United States · 1993
- Boyle v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1951
- Spencer v. CommissionerUnited States Tax Court · 1998
4 more not listed; retrieve them via the Exa API.
3Cited by6 opinions
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- Broz v. Comm'rUnited States Tax Court · 2011
- Broz v. Comm'rUnited States Tax Court · 2011
- Frontier Chevrolet v. Department of RevenueMontana Supreme Court · 2008
- Robert and Kimberly Broz v. CommissionerUnited States Tax Court · 2011
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