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If a contract for sale of business is drawn up I need to confirm

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if this would be an...
If a contract for sale of business is drawn up I need to confirm if this would be an acceptable situation.
If selling price is say, $750,000 and most of the business is good will, there will also be a non-compete. It will only be for 2 years and a for a 2 mile radius of the current business.
Understanding that the non-compete portion is considered as ordinary income, my accountant feels that we should take $75,000 towards it. I believe this is considerable.
After speaking with 2 CPA's, they both have suggested that if the buyer will agree, to make the non-compete as small as possible, say $5,000 or $10,000. Their theory is that as long as it is acceptable to the buyer, than IRS would not have an interest in investigating or auditing this monetary amount.
Please let me know, as an attorney, if, when you draw up the covenant, if it is possible?
Submitted: 7 years ago.Category: Business Law
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Answered in 27 minutes by:
10/1/2010
Business Lawyer: Law Educator, Esq., Attorney replied 7 years ago
Law Educator, Esq.
Category: Business Law
Satisfied Customers: 119,473
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Yes, as it is not illegal, the attorney can draft a contract with any clauses the parties agree upon as long as they are not immoral or illegal. Here the value of a non-compete is really subjective and open to interpretation and the value is based on what the parties believe it to be worth and agree that it is worth.

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