I was self-employed last year but received a royalty check from my previous employer because they licensed patented software I worked on from 13 years ago. I own TurboTax Home & Business. I received the royalty payment on a 1099-MISC.
My employer included a note issued by the IRS that said royalty payments for patents are consider by prior case law to be treated as capital gains.
TurboTax allowed me to enter the 1099, then asked a question whether this income came as a royalty on property I own or whether it came from "my business." (Note that it came from my prior employer.) I don't own property so I checked "It came from my business" and then TT put it on my Schedule C and computed that I owe self-employment tax on it. I don't think that's right.
So,
- Is that wrong?
- How can I get TurboTax to not do that?
