Who owns goodwill? — The case of Howard v. Commissioner
Abstract: Goodwill is an intangible asset that arises from a business’s name, reputation, customer loyalty, location, products and other similar factors. The classification of goodwill as personal or business can have important tax and legal consequences. This article looks at a recent case, Howard v. Commissioner, that illustrates some of these consequences, including how noncompete agreements may get in the way of taxpayer attempts to claim personal goodwill when they retire. Case citations: Howard v. Commissioner, U.S. District (E.D. Wash.), No. CV-08-365-RMP, July 30, 2010. Norwalk v. C.I.R., U.S. Tax Ct., T.C. Memo 1998-279, 1998 WL 430084.