Goodwill is a nebulous concept that is often not handled properly by taxpayers or the IRS. Two recent Tax Court cases highlight the IRS’s flawed approach and methodology to goodwill in two particular situations: the effect of goodwill in a corporate distribution, and the effect of goodwill in the estate-tax valuation of a closely held business. In both cases, the IRS used goodwill valuations to assert deficiencies against taxpayers, but the taxpayers argued that the goodwill was not theirs personally and therefore did not give rise to the deficiencies. These cases provide guidance on how to structure and maintain the ownership of goodwill in these and other contexts, e.g., the sale of a professional practice. A robust and clear understanding of the taxation of goodwill, therefore, is paramount in deal structuring. This article discusses the importance of handling the goodwill analysis properly and highlights the salient contexts in which goodwill issues arise. The article then notes a two-step approach to handling goodwill issues and offers strategies to maximize the tax benefits associated with goodwill. The planning strategies offered here reduce aggregate federal taxes paid and thus increase a transaction’s rate of return.