How should clyde treat the payment on his tax return

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lyde had worked for many years as the chief executive of Red Inudstries, Inc. and had been a major shareholder. Clyde and the company had a falling out and clyde was terminated. Clyde and Red executed a document under which Clyde's stock in Red would be redeemed and Clyde would agree not to compete against Red in its geographic service area. After extensive negotiations between the parties, Clyde agreed to surrender his Red stock in exchange for $600,000. clyde's basis in his shares was $143,000 and he held the shares for 17 years. the agreement made no explicit allocation of any of the $600,000 to clyde's agreement not to compete against Red. How should clyde treat the $600,000 payment on his 2012 tax return

Reference no: EM13835944

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