Dick Adams wrote:
- quote -

Interesting discussion. I authored a book, published about three years
ago. Title doesn't matter, but it was a special interest genealogy book
on 4,300 descendants of my Great great great grandfather along with
a chapter on 18th century North Carolina.

Arrangements with publishers include: 1. I set the price 2. Each
paperback would be printed on demand as orders via internet came in.
3. Lulu.com would print the book, ship it to purchaser, and send me the
profit I had added onto the cost of each book.

Needless to say I did not add a profit, since it was indeed a labor of
love, but had I tacked on 10$ for myself, would that 1,500$ plus have
been royalties? Or a profit sharing arrangement, i.e. my share of the
profit on sales? I lean to the latter, since this was not a trade or
business, nor profit motivated.

No documented expenses, unless you count postage and subscriptions to
genealogy type services over many (40 plus) years.

ChEAr$,
Harlan Lunsford, EA n LA
and published author

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Arthur Kamlet <-To[at]panix.com> wrote:
- quote -

My newest disingenuous book title is:
"I was Young and Innocent - Memoirs of a Gigolo."

- quote -

This raises an issue of a would-be writer spends a
few years working on a book and has about $1000/yr
in documentable expenses. Presuming a W-2 income
of $100K +/-, is this a Schedule C expense or does
it become part of the basis to be recovered as
return of capital.

I know there is a case on one-time book writers,
but I do not have the cite.

Dick

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In article <fvg3r6$l9v$1[at]reader2.panix.com> ,
Dick Adams <rdadams[at]panix.com> wrote:
- quote -

And all along you have been telling us that Sin is your
favorite book subject?


- quote -

If so, Line 21 is a where Hobby Income goes, but more later.

- quote -

Far be it from me to contradict our distinguished moderator.

But I can expand a bit. And mead tends to make me expand.

Either your work on the book was for profit, even if your goal was
not met, in which case you could be hard pressed to demonstrate
your "All Things Mead" was a mere hobby and not subject to SE.


Or your work on the book was, in cliche language, a Labor of Love
and not for profit, in which case it helps a bunch if indeed there
was no profit. If so, SE tax doesn't come up since there was no
profit, but expenses are now i) limited to income, and ii) moved
two letters over from Schedule C to Schedule A, & subject to the
2% haircut.


So if you really had a not-for-profit hobby activity in mind, even
if you accidentally made a profit, and this was a one-time activity
and "Things Mead: Part III: for Fun & Profit" never does get
written, and you never claimed expenses except perhaps on Schedule A,
and you then start reporting your Royalty payments on Line 21, then
you have a reasonable expectation of success.


Income from work you enter into as a hobby gets shown on Line 21,
though accidentally making a profit might push it into Sch C and
SE land.



--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

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Pats Fan <kingfish02375[at]yahoo.com> wrote:

- quote -

Of course the answer is "It Depends"!
Usually they go onto Schedule C. If you want to pay the SE
tax, put them on Schedule C and read no further.

The problem is usually to get them off Schedule C and onto
Schedule E. To do so, you need to demonstrate that you are
not in the trade or business of writing for income. (This
is one of the few tax breaks not open to academics who
publish to keep their jobs).

However, there are twists. If you write a book revelent to
your professional credientials and it is the only book you
ever write, you may be SOL.

But if I were to publish one and only one book on Baseball,
Mead, or Women (my three favorite subjects), I would put
the royalties on Schedule E because I am not in the trade
or business of writing.

Discussion my position with a CPA, EA, or Tax attorney who
knows your situation. An IRS auditor will no accept "I
read it on the Internet" as an explanation.

Dick

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- quote -

Book royalties are reported on Schedule C. It is in the nature of
books that once a book is published, the author doesn't work on that
book any more.

- quote -

Some people think it's unfair that authors can keep getting royalties
60 years later without lifting a finger to do so. (I know an author
who still gets royalties for a book she published in 1948. I want to
write books like that.)

- quote -

Well, hey, if you could put it on Schedule A, you could deduct it.
Dream on.

R's,
John

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On May 2, 10:40 am, Pats Fan <kingfish02...[at]yahoo.com> wrote:

- quote -

Schedule E instructions say "If you are in business as a self-employed
writer, inventor, artist, etc., report your royalty income and
expenses on Schedule C or C-EZ".

However, if you wrote your book years ago and no longer work on it
(but still are a writer), but you just collect royalties then is it
Schedule C or E? If you are no longer a writer then is it Schedule C
or E?

On Schedule C you have to pay SE tax. If you are not a writer, you
have no deductions related to writing, so it seems unfair to have to
pay SE tax on it.

If you could put it on Schedule E, would it be able to offset loss
from other passive activities such as rentals?

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- quote -

Sure. I have royalties from a 1992 book that I report on Sch C. What
would trigger a change?

R's,
John

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In article
<4c8975f3-3823-494f-89a3-fb7740abd1a2[at]r66g2000hsg.googlegroups.com> ,
Pats Fan <kingfish02375[at]yahoo.com> wrote:

- quote -

Not a taxpert myself, but as a textbook author I was similarly told many
years ago that author's book royalties could be considered as a form of
self-employment income and put on Sched C; and that, in similar vein,
they could be treated as self-employment income for purposes of putting
an appropriate fraction of them into a Keogh each year --- and two
successive professional preparers have been happy to go along with this.

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Pats Fan <kingfish02375[at]yahoo.com> writes:

- quote -

That reminds me...

Are the royalties from a particular work always on
the author's Sched C, no matter how many years ago
the work was produced?

--
Rich Carreiro rlc-news[at]rlcarr.com

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Can royalties be put on Schedule C or do they HAVE to be put on
Schedule E?
For instance, Writer can use potentially on Schedule C some amounts of
Health Insurance, Office in Home.

========================================= MODERATOR'S COMMENT:
A writer receiving royalties for his or her own works reports them
on Schedule C. Should that writer pass away, heirs might receive
decedant's royalties, and would report them on Schedule E.

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