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the covenant or upon the death of the grantor; and (k) the
existence of active negotiations over the terms and value of the
covenant not to compete. Molasky v. Commissioner, 897 F.2d 334,
337 (8th Cir. 1990) affg. in part and revg. in part T.C. Memo.
1988-173; Warsaw Photographic Associates, Inc. v. Commissioner,
84 T.C. 21 (1985); Furman v. United States, 602 F. Supp. 444
(D.S.C. 1984) affd. without published opinion 767 F.2d 911 (4th
Cir. 1985); see Beaver Bolt, Inc. v. Commissioner, T.C. Memo.
1995-549 and cases cited therein. a. Grantor's Business
Expertise
Respondent concedes that Holliday and Beaurline had
considerable experience in the beauty supply business. The
record is replete with evidence that Holliday and Beaurline had
the business experience necessary to compete effectively.
b. Grantor's Intent to Compete
Beaurline and Holliday discussed whether they should agree
to covenants not to compete. They decided that noncompete
agreements would be acceptable only if the "price was right" for
removing themselves from the beauty supply business for 5 years.
Beaurline credibly testified that he probably would have gone
back into the beauty supply business after the sale of State
Supply.
c. Grantor's Economic Resources to Compete
Holliday received approximately $1,850,000 and Beaurline
approximately $1,240,000 from their sale of stock in State
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