John H. Miner and Holly K. Miner - Page 13




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          Jasiak knew the auto parts business well and that he started                
          another auto parts store in 1975, which was open for about 1-1/2            
          years, shows that the covenant not to compete had value.                    
          Petitioners contend that the value of the covenant not to compete           
          is $175,000 less the book value of Cost Less which petitioners              
          contend is $10,000.                                                         
               We disagree.  We believe Jasiak's oral promise to Cost Less            
          not to compete had little or no value.  The fact that Jasiak                
          opened another auto parts store in 1975, which was open 1-1/2               
          years, does little to show he was a competitive threat to Cost              
          Less when he wanted to retire in 1986.  The auto parts business             
          was highly competitive.  It is not clear whether his oral promise           
          included a specific duration or geographic area.  His oral                  
          promise provided for no consideration.  Thus, it may not have               
          been enforceable.  See Amex Distrib. Co. v. Mascari, 724 P.2d               
          596, 601 (Ariz. Ct. App. 1986); American Credit Bureau, Inc. v.             
          Carter, 462 P.2d 838, 840 (Ariz. Ct. App. 1969).                            
               If we knew the fair market value of Jasiak's Cost Less                 
          stock, and we knew that the $175,000 payment was intended to be             
          made for both the stock and a covenant not to compete, then, as             
          petitioners request, we might be able to derive the value of the            
          covenant.  See, e.g., Annabelle Candy Co. v. Commissioner, supra            
          at 7-8; Beaver Bolt, Inc. v. Commissioner, T.C. Memo. 1995-549;             
          Standard Lumber & Hardware Co. v. Commissioner, T.C. Memo. 1958-            






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