Reporting compensation from leaving my clients with my former firm

[awcfp]

I retired and left my book of clients with my former firm.  How do I report ongoing quarterly compensation (a percentage of the net fees from them)?

[JamesG1]

Did you receive an IRS income reporting document like a W-2 or a K-1? 

Was this:

• An outright sale,
• An installment sale, or
• Recognized compensation for a specified period of time?

[awcfp]

No IRS form, just a handwritten note.  I was told that the firm won’t be reporting it to the IRS..

i expect it should be categorized as an installment sale because I’ll be paid a percentage of the net fees (after expenses) received from my clients quarterly for  3 years.

Thanks

[RobertG]

The sale of a client list is treated as a capital gain.

Sales over time may be reported by the seller under the installment method on Form 6252, unless the seller elects out of such treatment.