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covenant not to compete

Level 2

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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Level 15

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


ex-AllStar

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4 Replies 4
Level 15

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


ex-AllStar

View solution in original post

Level 2

Thank you !!  

Level 15

You're welcome


ex-AllStar
Level 15

You may also need to file Form 8594. 


ex-AllStar