Tuesday
August 4, 2015

Homework Help: income tax

Posted by Anonymous on Monday, March 26, 2012 at 7:46am.

Clyde had worked for many years as a chief executive of Red Industries. Inc. and had also 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 complete 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 had held the shares for 17 years. The agreement made no explicit allocation of any of the $600,000 to Clyde’s agreement not to complete against Red. How should Clyde treat the $600,000 payment on his 2010 tax return?

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

More Related Questions

Members