Purchased Royalty Income - Reported on 1099-MISC Box 7? Incorrect? Amortization?

[pickinat]

Hi there - last year I purchased a former literary agents rights to income from a number of books.  The current literary agent is responsible for paying my share of the income.  I received a 1099-MISC with Box 7 filled in with the income (non-employee compensation).  My understanding is that, seeing as I did not participate in the creation of these royalties, I would not be subject to self employment tax.  Do I need to request this tax form be adjusted with the income in a different box?

Totally separate question but my research suggests I can amortize this asset, does anyone have any insight on that?

[Anonymous]

box 7 is not necessarily SE income (from 1099--misc instructions)   the amortization oeriod under section 197 is 15 years. 

[Carl]

You need to contact the issuer to issue you a corrected 1099-MISC. Make the request in writing and send it to the issues via registred mail, return receipt "required", (not requested). They have 10 days from the date they receive it, to respond with either a corrected 1099-MISC, or a written explanation of just exactly what you did to 'earn" it.

Box 7 is for self-employment income with no exceptions.  Royalty income is reported in box 2. No exceptions.

If the issuer does not respond or if they respond with an unacceptable response, then you will need to print, sign and mail your return to the IRS yourself, along with the proof you notified the issuer and an explanation of why you are reporting it in box 2 on your tax return.

Doing it this way will get the issuer audited, and not you.

[pickinat]

Carl thanks for the answer - that’s super helpful!