Warren L. Baker, Jr. and Dorris J. Baker - Page 13




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          or goodwill.  Respondent also suggests that the termination                 
          payment is in the nature of income from self-employment, but                
          hedges that position in arguing that the payment is “similar to             
          an annuity” and a “retirement benefit”.  We note that respondent            
          did not determine that petitioners were liable for self-                    
          employment tax with respect to the termination payment.                     
               Petitioners argue that the termination payment was for the             
          sale or buyout of a business resulting in capital gain.  They               
          assert that petitioner developed a customer base and the                    
          termination payment was designed to protect the existing customer           
          base for the successor agent as well as compensate petitioner for           
          the goodwill and going business concern he developed.                       
          Petitioners rely on the concurring opinion in Jackson v.                    
          Commissioner, 108 T.C. 130, 141 (1997), which characterizes a               
          termination payment similar to the one at issue as a buyout of              
          the taxpayer’s business.                                                    
               The Coalition of Exclusive Agent Associations, Inc. (CEAA),            
          filed with leave of the Court an amicus brief pursuant to                   
          conditions specified in the Court’s order.  The CEAA’s argument             
          is similar to the arguments made by petitioners:  State Farm                
          purchased the goodwill generated by petitioner; therefore,                  
          petitioner is entitled to capital gain treatment.                           










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