- 24 -
purchase is not controlling. Copperhead Coal Co. v.
Commissioner, 272 F.2d 45, 48 (6th Cir. 1959), affg. T.C. Memo.
1958-9; Concord Control, Inc. v. Commissioner, 78 T.C. 742, 745
(1982).
Goodwill exists where there is an "expectancy of both
continuing excess earning capacity and also of
competitive advantage or continued patronage." Wilmot
Fleming Engineering Co. v. Commissioner, 65 T.C. 847,
861 (1967). More succinctly, it has been described as
the probability that 'old customers will resort to the
old place.' Metallics Recycling Co. v. Commissioner,
79 T.C. 730 (1982); Brooks v. Commissioner, 36 T.C.
1128, 1133 (1961); see also Miller v. Commissioner, 56
T.C. 636, 649 (1971). The indicia of goodwill are
numerous and include practically every imaginable trait
that has a positive bearing on earnings.
Solitron Devices, Inc. v. Commissioner, 80 T.C. 1, 18 (1983),
affd. without published opinion 744 F.2d 95 (11th Cir. 1984).
There frequently is an overlap between the goodwill and going-
concern value of a business. Id. at 20. Going-concern value has
been defined as "the additional element of value which attaches
to property by reason of its existence as an integral part of a
going concern", and that such value is manifested by the ability
of the acquired business to continue generating sales without
interruption during and after acquisition. Id. at 19-20; Concord
Control, Inc. v. Commissioner, supra at 746; VGS Corp. v.
Commissioner, 68 T.C. 563, 592 (1977).
In the instant cases, Bravo acquired an established and
profitable wholesale beer and beverage distribution business with
a workforce in place. The buyer had no startup expenses. In
Page: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 NextLast modified: May 25, 2011