I have a client (a partnership LLC) who has real estate in Manhattan. We previously operated it as a parking lot and rental properties subject to NYC UBT and social security tax (Parking operations only). In July 2014 we entered into a development project with an outside developer. We shut shut everything down and as of 1/1/2015 we are receiving $ 500,000 per year as a license fee from the developer until the project is complete.
My question: Is this license fee subject to NYCUBT and Social Tax? I see the fee being investment income or maybe a royalty?
any feedback?
Gary Geienheimer
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Gary Geisenheimer
Enrolled Agent
Woodbury NY
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