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servicing new and used vehicles. Thus, when petitioner executed
the stock sale agreement it indirectly acquired an interest, in
the form of stock, in a corporation engaged in a trade or
business.
Petitioner agrees that section 197 might apply if it had
acquired a new trade or business, but it contends that the
statute does not apply in the instant case because petitioner
continued the operation of its own existing business. Neither
the statute nor the legislative history contains any indication
that an interest in a new trade or business must be acquired in
order for section 197 to apply. Accordingly, we find that
petitioner acquired an “interest in a trade or business” within
the meaning of section 197 when it redeemed its stock from
Roundtree.
Finally, petitioner appears to argue that even if there was
an acquisition of an interest in a trade or business, it was by a
shareholder and not petitioner. Both the stock sale agreement
and the noncompetition agreement identify petitioner, Roundtree,
and Mr. Stinson, as the parties involved in the agreements.
Under the terms of the stock sale agreement, Roundtree agreed to
transfer the stock directly to petitioner, not to any
shareholders of petitioner. In its brief, petitioner states that
the noncompetition agreement was not entered into by any
shareholders of petitioner. Accordingly, petitioner’s argument
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