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in his individual capacity, Donald C. Chiappetti signed a promis-
sory note for $124,000 payable to CPC (promissory note). Donald
C. Chiappetti paid all amounts due under that promissory note.
Petitioner, who was then 55 years old, retired from the
practice of dentistry upon execution by him, of (1) the purchase
contract in his capacity as president of CPC and (2) the covenant
not to compete in his individual capacity.
In its Federal income tax returns (returns) for 1990 and
1991, CPC reported income of $14,522 and $38,248, respectively,
attributable to the covenant not to compete. CPC's income for
both 1990 and 1991 was offset by deductions CPC took in its
respective returns for those years, including net operating loss
carryforwards. As a result, CPC had no income tax liability for
1990 or 1991.
OPINION
Petitioners bear the burden of proving that respondent's
determinations in the notice of deficiency (notice) are errone-
ous. Rule 142(a);2 Welch v. Helvering, 290 U.S. 111, 115 (1933).
Petitioners attempted to satisfy their burden through testimonial
and documentary evidence.3
2 All Rule references are to the Tax Court Rules of Practice and
Procedure.
3 At trial, we conditionally admitted into evidence certain
stipulated exhibits to which respondent objected on grounds of
relevance (viz., Exhibits 8, 10, and 11). Although we shall
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