Cindy is a computer engineer and, while unemployed, invents a switching device for computer networks.$$ She patents the device but does not reduce it to practice.$$ She has a zero tax basis in the patent.$$ In exchange for $$1,200,000$ plus $$1\mathrm{.}50$ royalty per device sold, Cindy assigns the patent to a computer manufacturing company.$$ She assigns all substantial rights in the patent.$$ Which of the following is correct?$$

Question $5$ options:

Cindy automatically has long$-$term capital gain from both the lump$-$sum payment and the royalty payments.$$

Cindy does not have automatic long$-$term capital gain from either the lump$-$sum payment or the royalty payments.$$

Cindy automatically has long$-$term capital gain from the lump$-$sum payment, but not from the royalty payments.$$

Cindy automatically has long$-$term capital gain from the royalty payments but not from the lump$-$sum payment.$$