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and $17,688, respectively.
The issues remaining for decision are:
(1) Are petitioners required to include in their taxable
income for the year at issue the amount of $300,000 as consider-
ation for the covenant by petitioner William R. Enyart (Mr.
Enyart) not to compete with B & L Utility Contractors, Inc.
(B&L)? We hold that they are.
(2) Are petitioners liable for the year at issue for the
accuracy-related penalty under section 6662(a)? We hold that
they are.
This case was submitted fully stipulated. The facts that
have been stipulated are so found.
Petitioners resided in South Point, Ohio, at the time the
petition was filed.
In January 1981, Mr. Enyart and John Milem, Sr. (Mr. Milem),
incorporated B&L, which issued to each of them 50 percent of its
common stock. In August 1983, Mr. Enyart purchased all of Mr.
Milem’s B&L common stock and became its sole stockholder.
In April 1985, Janet Robinson Griffiths (Ms. Griffiths)
purchased 102 shares of B&L common stock. As a result of a
special meeting of B&L’s stockholders in July 1988, B&L issued
two additional shares of its common stock to Mr. Enyart, thereby
making him and Ms. Griffiths equal stockholders of B&L.
From January 1992 through April 1992, B&L experienced a
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