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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 2821
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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My company installs security systems and the customers sign

Customer Question

Hello - my company installs security systems and the customers sign a monitoring agreement. I sometimes sell these monitoring agreements. Is the lump sum received for the sale of those agreements ordinary income or a capital gain? Thank you.
Submitted: 1 year ago.
Category: Tax
Expert:  Barbara replied 1 year ago.

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you today.

Ordinary income can be simply defined as the income earned from providing services or the sale of goods. Capital gains are usually associated with the sale or exchange of property characterized as capital assets.

In your case, the lump sum received for the sale of the monitoring agreements is ordinary income.

Please let me know if I can assist you further.

Thank you and best regards,

Barb

Expert:  Barbara replied 1 year ago.

Just following up with you to see if you have any other questions. If so, please come back to me here at your convenience, and I will be happy to assist you.

If not, please take a moment to rate my answer since that is the ONLY WAY I RECEIVE CREDIT FOR ANSWERING YOU AND ALERTS JUST ANSWER TO COMPENSATE ME FOR PART OF THE MONEY THAT YOU HAVE ALREADY PAID.

Best regards,

Barb

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