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    covenant not to compete

    jlew1229
    Level 3

    Can a covenant not to compete be part of the installment sale, or does all the gain need to be recognized in the year of the sale?  

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    sjrcpa
    Level 15

    Yes and no. It's ordinary income. Taxable each year as paid.


    The more I know the more I don’t know.

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    4 Comments 4
    sjrcpa
    Level 15

    Yes and no. It's ordinary income. Taxable each year as paid.


    The more I know the more I don’t know.
    jlew1229
    Level 3

    Thank you !!  

    George4Tacks
    Level 15

    You may also need to file Form 8594. 


    Answers are easy. Questions are hard!
    sjrcpa
    Level 15

    You're welcome


    The more I know the more I don’t know.