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employment agreement--by which any of Arnold’s distribution
agreements with Mr. Mattus, Arnold’s relationships with the
supermarkets, and Arnold’s ice cream distribution expertise
became the property of petitioner. This Court has long
recognized that personal relationships of a shareholder-employee
are not corporate assets when the employee has no employment
contract with the corporation. Those personal assets are
entirely distinct from the intangible corporate asset of
corporate goodwill. See, e.g., Estate of Taracido v.
Commissioner, 72 T.C. 1014, 1023 (1979) (where sole shareholder
was sine qua non of corporation's success, corporation's goodwill
did not include the personal qualities of its sole shareholder);
Cullen v. Commissioner, 14 T.C. 368, 372 (1950) (personal
ability, personality, and reputation of sole active shareholder
not a corporate intangible asset where there is no contractual
obligation to continue shareholder's services); MacDonald v.
Commissioner, 3 T.C. 720, 727 (1944) (“We find no authority which
holds that an individual’s personal ability is part of the assets
of a corporation by which he is employed where * * * the
corporation does not have a right by contract or otherwise to the
future services of that individual.”); Providence Mill Supply Co.
v. Commissioner, 2 B.T.A. 791, 793 (1925).
In the case at hand, as in MacDonald v. Commissioner, supra,
petitioner never obtained exclusive rights to either Arnold’s
future services or a continuing call on the business generated by
Arnold’s personal relationships with the supermarket owners and
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