David's three-year US contract contained a provision that said, "If your employment is terminated, you are not to work for any other company in the industry for a duration of one year other than this one."

David was paid an extra one-off lump-sum of AU$65,000 on top of his annual wage for agreeing to this provision.

Q1) Answer the following questions to help David understand how the money he earned from his US job will be taxed in Australia. In your study, make sure to cite applicable laws, case law, and tax rulings. There are no calculations required.

Q2) What is David's source of income from his US employer?

Q3) Determine whether the one-time lump-sum payment would be considered revenue or capital.