Hi,

I need a paragraph in a discussion forum explaining the below question:

Thank you!

Lynette, a famous basketball player, is considering the possibility of transferring the sole right to use her name to promote basketball shoes produced and sold by the NIK Corporation. NIK will pay $2 million to obtain the right to use Lynette's name for the next 40 years. NIK may use the name on the shoes and as a part of any of the company's advertisements for basketball shoes. If Lynette signs the contract and receives the $2 mil lion payment, will she have to recognize capital gain or ordinary income? A partial list of research sources is Sec. 1221 Rev. Rul. 65-261, 1965-2 C.B. 281 Lynette, a famous basketball player, is considering the possibility of transferring the sole right to use her name to promote basketball shoes produced and sold by the NIK Corporation. NIK will pay $2 million to obtain the right to use Lynette's name for the next 40 years. NIK may use the name on the shoes and as a part of any of the company's advertisements for basketball shoes. If Lynette signs the contract and receives the $2 mil lion payment, will she have to recognize capital gain or ordinary income? A partial list of research sources is Sec. 1221 Rev. Rul. 65-261, 1965-2 C.B. 281