What I am looking for is what is the best way to treat the $2000 monthly income paid to father on his personal tax return. I don’t want to complicate this.
The son and partner do the business now as a new business, default to partnership. So the monies being paid to related party should be their capital investment basis, am I wrong here?
Are they paying $2000 monthly until somebody dies? You need to determine what the actual selling price is to calculate the gain. On the flip side, the payments aren't a capital investment. The debit side of the transaction is an asset (client list) and the credit side is a note payable. The monthly payment is purely a debt payment consisting of principal and interest.
and ex marks the spot where those rocks and anvils hit me.