Mr. and Mrs. Sykes operate a very profitable small business. This year, the Sykes recognized a $100,000 gain on sale of a trade name they had created and copyrighted for use in their business. Which of the following statements istrue?

Multiple Choice

• The $100,000 gain is capital gain eligible for a preferential tax rate.
• The $100,000 gain is capital gain against which the Sykes can deduct any capital losses recognized this year.
• The $100,000 gain is ordinary business income.
• Statements A and B are true.