R. William Becker and Mary Ann Becker - Page 16

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               allocated to this important and valuable covenant, that                
               intention must be respected. * * *                                     
                              *    *    *    *    *    *    *                         
               Did the parties, not preliminarily, but when they                      
               signed the agreement, intend to allocate a portion of                  
               the purchase price to the covenant not to compete?                     
          Id. at 7-8 (emphasis added).                                                
               In Better Beverages, Inc. v. United States, supra at 425,              
          Better Beverages purchased the assets of a soft drink business              
          located in Victoria, Texas.  A letter of intent signed by the               
          parties fixed a purchase price of $400,000 for all of the assets            
          of the selling company, except real estate and office equipment.            
          Id. at 426.  The letter of intent made no mention of a covenant             
          not to compete and did not allocate, for income tax purposes, the           
          $400,000 among the various assets.  Id.  Approximately 3 weeks              
          after the letter of intent was signed, the parties consummated              
          the transaction by use of a bill of sale whose terms were                   
          consistent with the letter of intent except, inter alia, it                 
          included a covenant not to compete for 10 years.  Id. at 427.               
          The purchase price remained the same and remained unallocated               
          among the various assets.  Id.                                              
               Better Beverages thereafter unilaterally allocated $244,547            
          to the covenant not to compete and amortized that amount on its             
          tax returns.  Id.  The seller of the soft drink business made no            
          allocation to the covenant not to compete, treating its gain as             
          gain from the sale of capital assets.  Id.  The Internal Revenue            





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