R. William Becker and Mary Ann Becker - Page 2

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                       MEMORANDUM FINDINGS OF FACT AND OPINION                        

               HAINES, Judge:  Respondent determined a deficiency in                  
          petitioners R. William Becker and Mary Ann Becker’s Federal                 
          income tax of $615,681 for their 1996 taxable year.1  Respondent            
          determined the following deficiencies in petitioner Becker                  
          Holding Corporation’s Federal income tax:                                   
                        Tax Year Ended           Deficiency                           
                        September 30, 1993       $1,566,852                           
                        September 30, 1994       86,973                               
                        September 30, 1995       245,644                              
          After concessions,2 the sole issue for decision is what portion,            
          if any, of the consideration paid by Becker Holding Corporation             
          (BHC) to R. William Becker (William Becker) in redemption of                
          William Becker’s stock in BHC should be allocated to a covenant             
          not to compete.                                                             
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated and are so found.               
          The stipulations of fact and the attached exhibits are                      
          incorporated herein by this reference.  At the time the petitions           
          were filed, William and Mary Ann Becker resided in Vero Beach,              


               1  Amounts are rounded to the nearest dollar.                          
               2  In a Stipulation of Settled Issues, filed Jan. 9, 2006,             
          in docket No. 6400-03, petitioner Becker Holding Corporation and            
          Subsidiaries (BHC) and respondent agreed to various adjustments             
          to BHC’s Federal income tax liability for the tax years ended               
          Sept. 30, 1993, 1994, and 1995.                                             




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