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posted Jun 4, 2019 8:32:07 PM

If I have received royalties from a book, I get the schedule C and not the schedule E. How can I get the schedule E on the 1099 misc to work?

I answer the questions asked but a schedule C is always used instead of schedule E.  I don't understand what I do wrong.  This is royalties from an ebook and this is not my main profession or main income.  

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6 Replies
Level 10
Jun 4, 2019 8:32:08 PM

Royalties from copyrights, patents, and oil, gas, and mineral properties are taxable as ordinary income.
In most cases, you report royalties in Part I of Schedule E (Form 1040). 

However, if you hold an operating oil, gas, or mineral interest or are in business as a self-employed writer, inventor, artist, etc., report your income and expenses on Schedule C or Schedule C-EZ (Form 1040).

Do NOTE that many authors are not in the business of making a profit or earning their living off of writing and the IRS may consider your income hobby income.  You must have intent to profit, so if you take losses for more than 2/5 years the IRS may adjust your return and require you to report as a hobby. If you consider it a hobby then report it as below:
https://ttlc.intuit.com/replies/5675605

Level 15
Jun 4, 2019 8:32:09 PM

To clarify what maglib said, if you wrote the book, the royalties belong on Schedule C, not Schedule E. You are a self-employed writer. It doesn't matter whether it's your main occupation.

Level 9
Jun 4, 2019 8:32:11 PM

Correct.

Level 10
Jun 4, 2019 8:32:12 PM

@rjs @TurboTaxMaryK1  actually I was updating for hobby income while you posted and just did so....  I just found the link if you consider it a hobby it is reported elsewhere.  Most authors, the IRS considers hobbyists.  The IRS had many trying to claim vacations and trips and hotels well in excess of income for research purposes and are very quick to claim deminimis income as hobby, so it is important to consider total income when reporting and if you are in the business of making a profit and can prove you have a plan to be profitable.

Level 9
Jun 4, 2019 8:32:14 PM

Good catch!

Level 9
Jun 4, 2019 8:32:16 PM