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Level 2

How to Report Royalty Income Without Generating a Schedule C

I received Patent Income $700 from 1099-MISC, box 3 instead of box 2.  In 2017 and 2018 TT didn’t create a schedule C.  This year Schedule C was created. How do I report without a Schedule C because I don’t own any business?   Thank you so much!

3 Replies
Employee Tax Expert

How to Report Royalty Income Without Generating a Schedule C

In this case, you can put the amount of Box 3 in Box 2 to create the Schedule E and omit the Boc 3 amount and delete the Schedule C.

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Level 2

How to Report Royalty Income Without Generating a Schedule C

MaryK1101,

Thank you for your quick response!  I have 2 more questions.

1) Can I just report the amt and TT lists it in Schedule 1, line 8 without generating any schedule C or E? 

2) I put the amt in box 2 and TT asked me to select:

  1. a) Investment income from property you own  
  2. b) Royalty income from your business, including artist royalties or operating a natural resources business. 

Q:  None of this apply to my case which is Patent.  If I selected option b) then it creates Schedule C  

Thank you! 

Expert Alumni

How to Report Royalty Income Without Generating a Schedule C

If the income is from intellectual property rights you created as as inventor, writer, or artist, it is self-employment income.

 

You can report it on Schedule 1 line 8, but then the IRS won't recognize it as a 1099-Misc, and may ask you about it.

 

Report it under the income section

 

  1. Select 'Less Common Income'
  2. Then select  'Miscellaneous Income'
  3. Then select 'Other reportable income'
  4. The next screen will ask if you had 'Any Other Taxable Income?'  Select Yes.
  5. The next screens will ask for a description and the amount.

 

The amount will be reported on Form 1040 Schedule 1 Line 8

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