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We sustain respondent’s determination of unreported income to the
extent of $66,207.
Petitioner maintains that buried somewhere in JJH’s large
cost of goods sold figure are several other business expenses
which are deductible, in addition to the expenses of $47,105
allowed above. We have carefully reviewed all arguments made by
petitioner as to his expenses, and we are unpersuaded that he had
business expenses greater than the amounts decided herein. For
example, petitioner argues that in 1990, JJH obtained a covenant
not to compete from petitioner for $105,000 to be paid over a 6-
year period, and that $17,500 of the cost of goods sold
represents a payment under the covenant. Purportedly, petitioner
sold his stock in JJH to a friend, Charles Losa (Losa), in
exchange for $1,000 and a covenant not to compete.8 We are
unpersuaded and find petitioner’s testimony and documentary
evidence on this point not credible. We have already found that
petitioner remained the beneficial owner of the JJH stock at all
times, and petitioner’s contention that he transferred anything
other than nominal title to the stock is not credible. Losa
admitted that he was a shareholder in “name only” and that the
transfer was effected to get assets out of petitioner’s name
8The purported covenant provides that petitioner will not
compete with JJH for 6 years within a 50-mile radius of the Muehl
residence. Petitioner is precluded from engaging in the
following activities: “Accounting Work, Bookkeeping, Financial
Consulting, Tax Preparation & Advice, Consulting, Service”.
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