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In 1999 I received non-compete income. Is non-compete income treated as ordinary income that I would report on my schedule D? Thanks in advance for any guidance.
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On what sort of informational form was the non-compete income reported?
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I have not received any confirmation as to how non-compete compensation was reported to IRS. I believe it will be reported via the 1099 form. By the way, I have never worked for the company I have the non-compete contract. Thanks ....
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<<In 1999 I received non-compete income. Is non-compete income treated as ordinary income that I would report on my schedule D? Thanks in advance for any guidance.>>

If you receive NTC income from a business asset that you sold, it's likely that the NTC income will be reported as the sale of a capital asset on Sch D.

But if you are simply receiving income for your agreement not to compete, it's generally simply ordinary income and should be included in your W-2.

TMF Taxes
Roy
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I am a CPA and had this particular situation this year. Income received as a result of a covenant not to compete is reported as "Other Income not subject to SE tax" on line 21.
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But if you are simply receiving income for your agreement not to compete, it's generally simply ordinary income and should be included in your W-2.
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If you are not an employee then there is no reporting requirement for the payor - IE it is not a capital transaction reported on 1099-b nor is it a "service rendered" reported on 1099-misc.

Although some payors do report it as "other income" IMO it is not required.

Pete


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