9th Circuit Affirms Tax Court; Noncompete Must Be Amortized Over 15 Years, Not Life of Agreement

Business Valuation UpdateVol. 9 No. 11
Legal and Court Case Update
November 2003

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5511 Motor Vehicle Dealers (New and Used)
441110 New Car Dealers
federal taxation
noncompete agreement, redemption, amortization, income tax
Frontier Chevrolet Co. v. Commissioner
329 F.3d 1131, 2003 U.S. App. LEXIS 10590
May 28, 2003
US
Federal Court
9th Circuit
United States Court of Appeals
Trott

Summary

Redemption was an “acquisition” within the meaning of IRC section 197 because Frontier regained possession and control over 75% of its stock.

See Also

Frontier Chevrolet Co. v. Commissioner

Full Text of Court Cases
May 28, 2003

Issue is whether company's redemption of 75% of its stock was an “acquisition” within the meaning of IRC section 197, and whether the covenant not to compete needed to be amortized.