AboutRonald J. Cappuccio, J.D., LL.M.(Tax) Expertise I have extensive experience in negotiating emerging business contracts and agreements, joint ventures, limited laibility company buy-sell agreements and buying and selling businesses. My approach is from a legal, tax and business prospective gearing my negotiations to practical solutions rather than merely drafting impractical documents
Experience I have have been an attorney since 1976 emphasizing business and tax law issues. I am an adjunct law professor in negotiation and alternative dispute resolution.
Organizations American Bar Associtiation
New Jersey State Bar Association
Camden County Bar Association
Question As we put together a letter of intent to purchase another business for a client of ours, is Goodwill treated differently than a covenant not to compete in any way? Is one treated as capital gains and the other as ordinary income?
Answer Brian:
Generally Goodwill and a Covenant Against Competition are treated the same for tax purpose and are IRC Sec. 197 property amortized over 15 years. Nevertheless, depending upon the form of ownership of the business the results will vary.
