- 8 - Nebraska’s business, York wrote off the $151,890 and paid $7,000 of Mid-Nebraska’s accounts payable, for a total purchase price of $158,890. On April 22, 1993, petitioner, on behalf of Mid-Nebraska, and Sack, on behalf of York, executed an addendum to the acquisition agreement purportedly changing the allocation of the sale price on assets other than fixed assets as follows: Item Amount Employment agreements $16,372 Customer list 130,978 Noncompete 1,489 Total 148,839 Petitioner signed and filed Mid-Nebraska’s Form 1120, U.S. Corporation Income Tax Return, for the year ended December 31, 1992 (1992 return), on October 15, 1993. The 1992 return reported, among other things, a capital gain of $125,645 and ordinary gain of $13,760 from the sale of property consisting of “vehicle, accts receivable, non-compete, employment agreements, customer list, goodwill”. Form 4797, Sales of Business Property, filed with the 1992 return showed the following calculation of the capital gain and ordinary gain:Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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