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The Commissioner, in his FSAA Notice for the taxable year
1989, disallowed in full the deductions claimed for amortization
of the noncompete agreements.
During the taxable year 1990, all individual petitioners
herein owned shares of the outstanding common stock of State
Supply.
The Commissioner mailed his notices of deficiency to the
individual petitioners for the taxable year 1990, which
disallowed in full the amortization deductions claimed for the
noncompete agreements.
Subsequent Events
Prior to the acquisition, Beaurline and Holliday were the
president and chairman of the board, respectively, of State
Supply. They continued in their respective offices for 1 year
after the acquisition of shares.
Approximately 2 months after the closing, Beaurline
approached Von Allmen to request a change in the noncompete
agreement so that Beaurline could work for a close friend who
owned one of State Supply's major suppliers, Lamaur. On
December 14, 1987, by letter from Terry Doverspike, the
noncompete agreement with Beaurline was amended in order to allow
him to work for Lamaur.
On February 26, 1991, Holliday died of a heart attack.
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