Alice Smith is a retired attorney who had been in practice for nearly 35 years before retiring from her firm, Jones, Brown & Smith. Alice received the following in 2022:

A payment of $50,000 from Jones, Brown & Smith. Alice did not perform any services for Jones, Brown & Smith in 2022;

A payment in the amount of $46,000 for non-legal consulting work she performed;

Dividend income of $2,000;

Royalties of $35,000 from the licensing of a patent.

For each item of income/loss enumerated what is the nature of each (i.e., passive, non-passive, etc.)? Explain your answer.

Question

Alice Smith is a retired attorney who had been in practice for nearly 35 years before retiring from her firm, Jones, Brown & Smith. Alice received the following in 2022:

A payment of $50,000 from Jones, Brown & Smith. Alice did not perform any services for Jones, Brown & Smith in 2022;
A payment in the amount of $46,000 for non-legal consulting work she performed;
Dividend income of $2,000;
Royalties of $35,000 from the licensing of a patent.

For each item of income/loss enumerated what is the nature of each (i.e., passive, non-passive, etc.)? Explain your answer.

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Alice Smith is a retired attorney who had been in practice for nearly 35 years before retiring from her firm, Jones, Brown & Smith. Alice

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