@ColeenD3
This invention was made as part of my PhD work at my Univ in Oklahoma when I was there. I am listed as an inventor in the project along with my professor. This one-time royalty (more than $20,000 total amount) was given by my PhD project funders (licensee) to the university (licensor) in 2020 and I was given 25% of the total royalty amount. The university has complete ownership and copyright of this work. The university is in Oklahoma. I was wondering if I can consider the university as the "manufacturer" in Oklahoma and claim the deduction below for my part of the royalty. The licensee company that paid the royalty is also in Oklahoma.
"Royalty income earned by an inventor from a product developed and manufactured in this state shall be exempt from income tax for a period of seven years as long as the manufacturer remains in this state."
Another question is, for federal tax filing, should this income be treated as investment income (Schedule E) or business income (Schedule C)? I received a 1099-MISC for this royalty payment. As I mentioned earlier, the university has complete ownership and copyright of this work.
