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fisheka
Level 1

I pay a friend a % of royalties I contractually receive from a company's use of patent. Can I deduct these payments to him? Where in TT do I report the payments to him?

When a patent was awarded to my husband, he verbally agreed to give his friend 15% of all future royalties he might receive on his patent (up to a particular dollar amount).  He did this because his friend fronted the money for patent attorney fees and several other expenses related to development.  Husband now contractually receives royalties from a company (receives 1099-MISC with $ in Box 2 (Royalties)).

We file Sched C to note the Royalty payments.  Can we deduct the payments to his friend? Where in TT do I record those payments.  

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Accepted Solutions
MichaelL1
Level 15

I pay a friend a % of royalties I contractually receive from a company's use of patent. Can I deduct these payments to him? Where in TT do I report the payments to him?

In TurboTax when you are listing the expenses on the Sch C Royalty, you would go to last expense area listed "Other Miscellaneous Expenses" and list his name and then the amount he was paid in 2017.

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1 Reply
MichaelL1
Level 15

I pay a friend a % of royalties I contractually receive from a company's use of patent. Can I deduct these payments to him? Where in TT do I report the payments to him?

In TurboTax when you are listing the expenses on the Sch C Royalty, you would go to last expense area listed "Other Miscellaneous Expenses" and list his name and then the amount he was paid in 2017.

View solution in original post

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