I have a 1099-MISC for stock photography royalties but TurboTax seems to want mark me as self-employed because of this even though it's not really the case.

[alexandre-norman]

I don't have any self-employement situation related to this 1099-MISC given that those are just stock photography created a long time ago that are still selling. Can I avoid a complicated self-employement situation given the circumstances? TurboTax seems to want to have me switch to the self-employed Edition but TaxAct (as a point of comparison) seems to have no problem just reporting the income from the 1099-MISC appropriately. The income on the 1099-MISC is reported in Box 2.

[Coleen3 · Accepted solution]

If the income is in Box 2 of the 1099-Misc follow the steps below. If it is reported in Box 7, you can all the issuer and see if they will send you a corrected form. If they have a valid reason for putting the income in Box 7, you will need to fill out Schedule C.

1. Search for Royalty and then click the "Jump to" link in the search result.
2. Answer Yes to the question Did you have any rental or royalty income and expenses?
3. Follow the on-screen instructions as you proceed through the  royalties section.

[alexandre-norman]

The royalties section has a very specific language about royalties that makes me wonder if stock photography really falls under that category: "A royalty is a payment, typically based on the number of units sold, by a producer of minerals, oil, natural gas, and other natural resources, to the owner of the site or to the owner of the rights of the property being extracted. For example, royalty income received for the production of oil is measured on the number of barrels sold.".

[Coleen3]

This is from another source. Royalties are funny things. Generally, we associate royalties with music - and sometimes books. But royalties are bigger than books and music: they are payments for the use of your property. That could be the use of your intellectual property but it could also be the use of your real property. The source of royalty income can run the gamut from copyrights to patents to oil, gas and mineral properties.