Harlan Lunsford wrote:
- quote -

Well, then your statement was correct: there would have been
no repercussions had you not published <G> .

Katie

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- quote -

For a fee? (grin

Actually I have a publisher who takes my uploaded file and
cover page, stores it, and print just one copy at a time for
him who orders it online. See www.lulu.com

ChEAr$,
Harlan Lunsford, EA n LA

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Katie wrote:

- quote -

But of course, Katie. You know that; I know that, and Dick
even knows that I know that.

But of course I could still publish, even on that web site
which will print just one book at a time; no costly
guaranteed press runs.

I found it useful last year but published my book at cost,
so there was no profit motive atall. Of course I didnt'
deduct any expenses, either, since it was for family;
meaning cousins all over the world.

ChEAr$,
Harlan

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- quote -

Harlan, I can find you a publisher - as long as you agree to
pay the printing costs. (They're not really vanity
publishers - they actually do proper editing and have access
to all distribution channels.)

With that it might go a bit farther to convince the IRS.

Stu

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"Katie" <katiej_1958[at]yahoo.com> wrote:

- quote -

To convince an auditor that you had a profit motive, it would
be a good idea to have a publisher and a title for the book.

It's amazing what tax planning does for you!

Dick

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- quote -

umm, Harlan ... see Reg. 1.183-2. You'd still have to
convince IRS (should the question arise) that your research
was an activity engaged in for profit.

Katie

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- quote -

So then, if after three years working on my Scottish whisky
book and I just give up, here are no reprecussions should
I NOT publish?

Scotch ChEAr$,
Harlan

Moderator:
That's known as playing the Audit Lottery and I have a high
degree of certainty that you would not do it.

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- quote -

Sheesh, guys. How hard is it to look up Sec. 263A?

Actually I'm cheating because I used this very issue as a
case study for a tax research class I taught for a CPA firm
a couple of months ago.

IRC Sec. 263A(h) provides an exception to the uniform
capitalizaton (Unicap) rules for "qualified creative
expenses." These are expenses that are "paid or incurred by
an individual in the trade or business of such individual
(other than as an employee) of being a writer, photographer,
or artist," and that would be currently deductible were it
not for the unicap rules. A "writer" is defined "as an
individual whose personal efforts create (or may reasonably
be expected to create) a literary manuscript, musical
composition (including any accompanying words), or dance
score."

Oddly enough there are no regulatons under 263A(h); the
section in the regs is "reserved." Guess they're still
working on it. In the meantime, a free-lance writer should
be able to deduct the expenses of researching and writing a
book or other type of manuscript. Of course, the writer is
in the same position as any other individual in having to
show that his or her activities are engaged in for profit.
The "hobby loss" rules of Reg. 1.183-2 would apply.

Katie in San Diego

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How about taking a look at this web site. Read all the
cases and ask yourself, are you in business to make a
profit?

My choice of a book topic would of course be very
interesting to me, but that is no guarantee that anybody
else would be interested. Be realistic and assess your
chances. Ask others' opinions, those who should know your
field and can offer opinions.

Then maybe post some more information here.

the web site is: http://www.eclectics.com/articles/taxes.html

ChEAr$,
Harlan Lunsford, EA n LA

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"nickr" <nickravo[at]gmail.com> writes:

- quote -

In 1988 Congress exempted authors and artists from the
Unicap rules.

See 26 USC 263A(h)

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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- quote -

I think there is some sort of compromize and caveats written
into the regs to avoid this. And to help out the many
writers who sometimes take years to earn income from a
particular project. Anyone familiar with this issue?

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- quote -

Anyone familiar with the IRS rulings?

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Harlan Lunsford wrote:

(schnipped......!

- quote -

And it will be a compendium of all Scottish whiskies with
tasting notes on each and reports of visits to all the
distilleries, both present and past sites.. Should take me
about.... oh..... ten years to write it.

ChEAr$,
Harlan Lunsford, EA n LA

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nickr wrote:
- quote -

Oh I imagine there is such guidance from IRS somewhere. In
fact our essteamed moderator may have researched this once.

However, if IRS allows such expenses year to year before a
book is published, they must be flooded with schedule c's
with zero income from would be writers who don't get
published, nor ever will be.

If its' okay, then I'll start to work on my next book.

ChEAr$,
Harlan Lunsford, EA n LA

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"nickr" <nickravo[at]gmail.com> wrote:
- quote -

You're right. IRC Section 263A.

Stu

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I was thinking about this some more and your figure of
$20,000 in expenses seems exorbinant to me. You'd need to
be writing a best seller to recover that cost.

I do not prepare tax returns. Someone who does would have
to answer this. The only way I see to deduct that amount
of expenses is on a Schedule C, but you have no income. I
wonder if you can do it against your wife's income.

Be aware that if audited, you are going to need one hell of
a convincing story or one hell of a gullible auditor not to
get this book classified as a hobby.

Also if audited, do not go to the audit rather have a CPA,
an Enrolled Agent, or a Tax Attorney who specializes in
audit representation go in your place <PERIOD
My child bride wrote a book, "Surnames for Women, a
Decision-Making Guide" published by McFarland. She stills
gets royalties because a Women's Studies Professor somewhere
in Michigan copies pages from it for a course. The royalty
payments are 'other income', not earned income, because it is
the only book she ever wrote.

Dick

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Stuart A. Bronstein wrote:
- quote -

Sounds implausble on on a number of fronts .... I think
there is a specific IRS ruling on this stuff.

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Dick Adams wrote:
- quote -

Let's say $20,000 expenses, travel, computer, books, etc.
Zero income for the year. (Spouse works. have investment
income.)

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Dick Adams <rdadams[at]smart.net) wrote:
- quote -

My understanding is that writers generally have to
capitalize their expenses and depreciate them over the life
of the book's income stream, or something like that.

Is that at all accurate?

Stu

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nickr wrote:

- quote -

This is a very clear facts and circumstances issue. The
is, as it usually is, "it depends"! In this case, it depends
on how much income you have and the expenses being discussed.
If you fill-in the pieces of the last sentence, someone may
be able to assist you.

Dick

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