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- A Covenant Not to Compete for the seller of the business. I know that it would be listed on Form 4797, but would it be considered ST or LT?
A Covenant Not to Compete for the seller of the business. I know that it would be listed on Form 4797, but would it be considered ST or LT?
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DRS19
Level 3
03-12-2023
02:01 PM
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DRS19
Level 3
03-12-2023
04:02 PM
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That is what I originally thought, but then I found this. A covenant not to compete that is in the purchase agreement can be treated as a capital asset to the purchaser and seller, if the covenant is closely related to the sale of business goodwill. In my situation, I think that it is, but it is definitely confusing.
