1. Cathy Bullet, because of her love for music, has purchased the rights to one of the songs written by Elvis. She estimates that the royalties from the song will total about $10,000 per year for the next few years. She has no plans to purchase any additional song rights.

1. Explain whether the royalties she receives would be treated as business income or property income (Ensure you explain WHY)

2. Indicate how any gain or loss on disposition of the rights would be taxed.