Hubert purchases Fran's jewelry store for $950,000. The identifiable assets of the business are as follows: $\begin{array}{lrr}&\text { Basis } & \text { FMV }\
\text { Inventory } & \$ 90,000 & \$ 97,000 \
\text { Accounts receivable } & 55,000 & 50,000 \
\text { Building } & 100,000 & 225,000 \
\text { Land } & 280,000 & 300,000
\end{array}$ Hubert and Fran agree to assign $110,000 to a seven-year covenant not to compete. How should Hubert allocate the
$950,000 purchase price to the assets?

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The Answer of Hubert purchases Fran's jewelry store for $950,000. The identifiable assets of the business are as follows: $\begin{array}{lrr}&\text { Basis } & \text { FMV }\
\text { Inventory } & \$ 90,000 & \$ 97,000 \
\text { Accounts receivable } & 55,000 & 50,000 \
\text { Building } & 100,000 & 225,000 \
\text { Land } & 280,000 & 300,000
\end{array}$ Hubert and Fran agree to assign $110,000 to a seven-year covenant not to compete. How should Hubert allocate the
$950,000 purchase price to the assets?

Hubert Purchases Fran's Jewelry Store for $950,000 Hubert and Fran Agree to Assign $110,000 to a Seven-Year