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PARR, J., concurring: I concur in the result reached by the
majority. I would conclude that the termination payments
received by petitioner are not subject to self-employment tax,
because in my judgment the payments are in the nature of a buyout
of petitioner's business by State Farm. Thus, they should be
treated as a sale of a capital asset and are excluded from the
definition of self-employment income under section 1402(a)(3)(A).
The payments are in reality either for the goodwill of
petitioner's former insurance business (his books of customer
accounts) or for a covenant not to compete.
If the termination payments are for goodwill, then they are
attributable to the sale of a capital asset. Goodwill has been
characterized as the expectation that old customers will resort
to the old place of business. Goodwill is acquired by the
purchaser of a going concern where the transfer enables the
purchaser to step into the shoes of the seller. See Decker v.
Commissioner, 864 F.2d 51, 54 (7th Cir. 1988), affg. T.C. Memo.
1987-388; Winn-Dixie Montgomery, Inc. v. United States, 444 F.2d
677, 681 (5th Cir. 1971). Here the terms of the Agreement
between petitioner and State Farm allowed petitioner's successor
agent to step into his shoes. The successor agent continued the
same business and sold insurance to the same customers.
Petitioner's goodwill, built up over a 33-year period, passed to
the successor agent. State Farm served as the conduit by making
payments to petitioner under the termination arrangement, but
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