Karen Kirbey grants Pamela Prentiss a franchise to sell handcrafted gifts. Pamela pays Karen 15 percent of all revenue. Sales for 2012 were $550,000. How will Pamela treat her payment to Karen on her tax return?
A) $82,500 short-term capital loss
B) $82,500 long-term capital loss
C) $82,500 nonbusiness deduction
D) $82,500 business expense deduction
Correct Answer:
Verified
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