1099-MISC shows royalties paid to my taxpayer - This taxpayer has a small Schedule C business - Are the royalites (from a book she autd) reported on Schedule E or Schedule C? It appears I can do either. The Schedule C is her business as an author. However, if I report the royalties on Sch E, she avoids the SE tax.
Agree - E.
Royalties from a book she authored would be considered self employment income and should be reported on Schedule C and subject to SE Tax.
I agree with dwim4. I always thought that roaylties received due to your own efforts were considered Schedule C/SE income.
Not often I disagree with Archie and AM but this is Schedule C income subject to SE Tax.
Dusty
I bow to dwim, since she earned the royalties via her business. Sch C.
Ok, so which is it? As a self employed photographer who licenses my work for advertising, does it go on Sch. E or on Sch. C?
In Turbotax, the whole royalty section asks for addresses of the property. It's IP, not physical property. Do you just put your business address?
OK, I was wrong. So shoot me already.
I could find one case on point: Hittleman v. Commissioner, T.C. Memo 1990-325. Here's the relevant paragraph:
*******************************
Petitioner is an admitted author and instructor. He has written several books on Yoga and related subjects from which he has received royalties. During the years under consideration petitioner was regularly and continuously engaged in teaching Yoga workshops which produced substantial income. We have concluded hereinbefore that the deposits made to YUC's bank accounts which represent receipts from book royalties and Yoga workshops constitute income attributable to petitioner rather than YUC. Therefore all such income is self-employment income to petitioner which is subject to self employment tax under section 1401.
****************************
