[ithndr]

I resign my position with Farmers Insurance as an insurance agent. They allow me to have the policies in my agency reassigned "sell" to another agent/agency with Farmers. The other agent pays me $50,000 for this because he will now get paid the renewal commissions. I did not own the policies, Farmers Insurance owns all the policies, we work as independent contractors as "exclusive agents". Is the $50,000 taxable as income to me?

[Fr_Chuck]

Yes, while of course actual ownership of policies is an insurance company, your had a contract for commissions from these policies. What is being sold, is your future rights to these policies. With some companies, if you were an agent for a number of years, you would just continue to receive commissions, your company is selling the right to future commissions to another agent.

This payment to you, is a payment for all rights and possible commission of these policies, and would be taxable as such. You should on next year receive this amount shown on a 1099.