International Multifoods Corporation and Affiliated Companies - Page 29

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               goodwill, and the franchise are so interrelated as to                  
               be indistinguishable, all the value should then be                     
               assigned to the franchise. * * *  [Emphasis added; fn.                 
               ref. omitted.]                                                         

               In Zorniger v. Commissioner, 62 T.C. 435 (1974), we                    
          addressed the issue of whether the taxpayer's shares of stock in            
          a Chevrolet dealership possessed goodwill that should have been             
          reflected in the valuation of the stock for purposes of the gift            
          tax.  We held that no goodwill existed in the stock, since the              
          dealership agreement required Chevrolet's prior approval of any             
          transfer of the taxpayer's interest therein.  Id. at 444-445.  We           
          relied principally on our decision in Akers v. Commissioner, 6              
          T.C. 693, 700 (1946), where we determined that no goodwill                  
          existed in a General Motors' dealership upon liquidation, as the            
          taxpayer had a nontransferable, personal services contract, which           
          could have been divested from the taxpayer under circumstances              
          outside his control.  In Zorniger v. Commissioner, supra at 444-            
          445 (quoting Akers v. Commissioner, supra at 700), we stated:               

               "The franchises were not assignable and by their terms                 
               were made personal contracts between the parties.  Such                
               good will or going-concern value as the corporation                    
               might have created during its existence was subject at                 
               all times to be divested by termination of the                         
               franchises without action by the corporation.  * * *                   
               The good will, if any, continued to be embodied in the                 
               franchises and they, under the circumstances, were not                 
               property subject to transfer or other disposition by                   
               the corporation."  [Citation omitted.]                                 







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