Mills Pharmaceuticals, Inc. v. Commissioner
United States Tax Court
Petitioner entered into a contract with Stanford, whereby petitioner obtained the exclusive right to purchase the products manufactured by Stanford at 80 percent of list price. The price charged by Stanford was too high to permit petitioner to successfully compete in the market. Therefore, petitioner acquired the stock of Stanford and amended the contract.
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Petitioner entered into a contract with Stanford, whereby petitioner obtained the exclusive right to purchase the products manufactured by Stanford at 80 percent of list price. The price charged by Stanford was too high to permit petitioner to successfully compete in the market. Therefore, petitioner acquired the stock of Stanford and amended the contract. Held, neither a covenant not to compete nor a premium paid for the intangible asset has been demonstrated, and therefore petitioner is not entitled to an amortization deduction.
1Opinion of the Court
Sterkett, Judge:.
The Commissioner determined deficiencies in the petitioner’s Federal income tax, as follows:
Tamable year Amount
Jan. 1, 1964, to Oct. 31, 1964_$2, 709. 87
Oct. 31, 1965_ 3,143. 51
Oct. 31, 1966_ 3,121. 78
The issue for adjudication is whether petitioner, Mills Pharmaceuticals, Inc., is entitled to amortization deductions under section 167(a), I.R.C. 1954,1 for the years in question with respect to an amount allegedly paid for a covenant not to compete or, in the alternative, with, respect to an alleged premium paid for an intangible asset.2'
FINDINGS OF FACT
Some of the facts have…
2Cases cited10 opinions
- Commissioner v. DanielsonCourt of Appeals for the Third Circuit · 1967
- Kimbell-Diamond Milling Co. v. Comm'rUnited States Tax Court · 1950
- Ullman v. CommissionerCourt of Appeals for the Second Circuit · 1959
- Kimbell-Diamond Milling Co. v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1951
- Commissioner of Internal Revenue v. Seaboard Finance Company, Seaboard Finance Company, Cross v. Commissioner of Internal Revenue, CrossCourt of Appeals for the Ninth Circuit · 1966
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3Cited by7 opinions
- Baldarelli v. CommissionerUnited States Tax Court · 1973
- New York Fruit Auction Corp. v. CommissionerUnited States Tax Court · 1982
- Baldarelli v. CommissionerUnited States Tax Court · 1973
- Cutler v. CommissionerUnited States Tax Court · 1977
- Mills Pharmaceuticals, Inc. v. CommissionerUnited States Tax Court · 1971
2 more not listed; retrieve them via the Exa API.