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Matt is a resident of Nevada who performs services in California and Nevada. He sells his tax and accounting practice for $500,000 of goodwill. There
Matt is a resident of Nevada who performs services in California and Nevada. He sells his tax and accounting practice for $500,000 of goodwill. There is no covenant not to compete. The sales price is based on the prior years gross income, of which $400,000 was from California clients and $100,000 was from clients outside of California. What percentage of the sales price is taxable on Matts California income tax return?
A. 10%
B. 20%
C. 50%
D. 80%
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