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Less stock is equal to its par value, or that the fair market
value of Jasiak's Cost Less stock is $10,000 here.
We conclude that there is no credible evidence that Jasiak's
oral promise not to compete had any value.
c. Whether To Estimate an Amount To Allocate to
Jasiak's Promise Not To Compete
Petitioners contend that we should apply the Cohan rule
(enunciated in Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d
Cir. 1930)), to estimate an amount for Jasiak's promise not to
compete if we decide that Cost Less may not amortize $165,000.
We disagree. We may estimate an amount under Cohan if the
taxpayer is entitled to deduct some amount. See id. Here, as
discussed above at paragraph II-A-2-a, Cost Less may not deduct
any amount for Jasiak's promise not to compete because Jasiak and
petitioner intended to allocate none of the $175,000 payment to
Jasiak's promise. Thus, Cohan does not apply.
d. Cases Cited by Petitioners
Petitioners contend that this case is indistinguishable from
Standard Lumber & Hardware Co. v. Commissioner, supra, in which
we permitted the taxpayer to amortize the cost of a covenant not
to compete. Petitioners contend that Standard Lumber & Hardware
Co. supports the proposition that Cost Less may allocate part of
the $175,000 payment to Jasiak to a covenant not to compete
despite the terms of the written agreement of sale. Petitioners
also contend that Standard Lumber & Hardware Co. supports the
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