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You are correct that non-compete agreement is classified as amortizable section 197 asset and as such it is amortized over 15 year period.However - in your situation - there mist be cost basis to claim amortization.If you paid certain amount to obtain the non-compete agreement - that woudl be cost basis.But if you do not have any basis - there is nothing to amortize.
We may not use expected losses which were not included into your income as the cost basis.But if for some reason that amount WAS included into your taxable income as a part of sale contract - the situation might be different.
How you handle proceeds from your business is a separate issue - we may address that - but I do not want to mix several issues to avoid confusion.
Regarding the non-compete agreement....
For instance if you PURCHASE the business and business assets include the non-compete agreement - so you allocate a part of the purchase price to that agreement - for instance $10,000 - that woudl be your basis which you PAY - and you woudl amortize that cost over 15 years.
However - if you the one who SIGNED the agreement - and do not pay anything - you do not have any basis and there is nothing to amortize.