Jane Smith, because of her love for music, has purchased the rights to one of the songs written by The Beatles. 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. a. Explain whether the royalties she receives would be treated as business income or property income (Ensure you explain WHY) b. Indicate how any gain or loss on disposition of the rights would be taxed.

Part 2 During 2019, Jennie King acquired a six-unit apartment building for $350,000. While it was her intention to operate the building as a rental property, two months after her purchase she received an unsolicited offer to purchase the building for $400,000. She accepted the offer and sold the building. a. Calculate the gain on the property b. Should the gain be treated as a capital gain or as business income? Justify your conclusion.