I need help with following scenario: I was a W-2 employee of firm A. I had no equity position in firm A whatsoever. I resigned my position with firm A and then took a similar position with a competitor firm B as a W-2 employee without any equity position in firm B. Due to my prior contract (which included a restrictive covenant that continued for 24 months after I leave firm A) with firm A, I had to buy-out of a restrictive covenant with firm A. I paid the total "buy-out" fee to firm A in 2012; this allowed me to take the position with firm B.
My question is how to best deduct the buy-out fee on my federal taxes to achieve maximum possible benefit. I am not self-employed or an independent contractor.
Also, if there was no sale/transfer in ownership interest and there was no sale/transfer of shares/stock, do I still have to amortize the above 'buy-out" fee over fifteen years?
My question is how to best deduct the buy-out fee on my federal taxes to achieve maximum possible benefit. I am not self-employed or an independent contractor.
Also, if there was no sale/transfer in ownership interest and there was no sale/transfer of shares/stock, do I still have to amortize the above 'buy-out" fee over fifteen years?