Music Royalty Investments

[mrgills]

I invest in music royalties. Some of these royalties I own for limited durations (10 years is the most common). A couple of questions from this:

1) Where do I enter this income? I received a 1099-MISC from the company I invested through.

2) How to I account for depreciation? Buying the rights to a music royalty for 10 years obviously means that asset depreciates over those 10 years (as it's worthless after that time).

[Carl]

A 1099-MISC with income reported in box 2 (which is royalty income) is reported on SCH E. In TurboTax, that's in the Rental & Royalty Income (SCH E) section under the Personal Income tab. (It's under the Business tab if you're using the online self-employed or desktop Home & Business version.)

Also, your royalty income is not depreciated. Instead, it's "depleted". The program will walk you through the depletion stuff, if such applies to your specific type of royalty income.

[mrgills]

Fantastic, thanks!