Malky is manager of York Steel Ltd. His contract is for 10 years. In the third year Malky enters into a restrictive covenant which provides that during the remainder of his contract he must not reveal or use confidential information other than to his employer. It further provides that he must not work for a competitor during the remainder of the employment agreement. Consideration for entering into the agreement is $40,000. Is this capital or income in Malky’s hands?
Malky is manager of York Steel Ltd. His contract is for 10 years. In the third year Malky enters into a restrictive covenant which provides that during the remainder of his contract he must not reveal or use confidential information other than to his employer. It further provides that he must not work for a competitor during the remainder of the employment agreement. Consideration for entering into the agreement is $40,000. Is this capital or income in Malky’s hands?
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter6: Losses And Loss Limitations
Section: Chapter Questions
Problem 14P
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Malky is manager of York Steel Ltd. His contract is for 10 years. In the third year Malky enters into a restrictive covenant which provides that during the remainder of his contract he must not reveal or use confidential information other than to his employer. It further provides that he must not work for a competitor during the remainder of the employment agreement. Consideration for entering into the agreement is $40,000. Is this capital or income in Malky’s hands?
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