Herman sells his carpet-cleaning business to Elki. As part of the sales agreement, Elki pays Herman $3,000

Question:

Herman sells his carpet-cleaning business to Elki. As part of the sales agreement, Elki pays Herman $3,000 for his agreement not to open another carpet-cleaning business in the area for 3 years.

Identify the tax issue(s) posed by the facts presented.
Determine the possible tax consequences of each issue that you identify.