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Karen Kirbey grants Pamela Prentiss a franchise to sell handcrafted gifts. Pamela pays Karen 15 percent of all revenue. Sales for 2018 were $550,000. How

Karen Kirbey grants Pamela Prentiss a franchise to sell handcrafted gifts. Pamela pays Karen 15 percent of all revenue. Sales for 2018 were $550,000. How will Karen treat the payment she receives on her 2018 return?

$82,500 short-term capital gain

$82,500 long-term capital gain

$82,500 ordinary income

No gain or income

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