itonewbie
Level 15
"I've read the agreement, and basically the Sole Proprietor (a Veterinarian) received 10K to agree not to compete within 30 miles of town. I understand this is ordinary income but not subject to SE tax. Anything better than Line 21?"

@Greta On what basis are you making a determination that it is ordinary income but not subject to SE tax?  Even if that is the case, you still need to determine the character(s) of the income for proper reporting.  It would be unusual for veterinarian to engage in his/her professional practice as a sole practitioner rather than as a body corporate, in which case, you will need to examine not only the sales agreement that is between what might be a personal service corporation and the buyer but also the employment agreement of the veterinarian as well as any termination agreement he may have received as a result of or in conjunction with the sale.  More info is needed for this.

[Edit: Included a minor thought on character of income]
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