Royalty income

[billmcse]

So I received a nominal amount ($42) from a book sale on Amazon. Writing nor book sales is my business. I received a 1099-MISC form but there are two options for 1099-MISC source of income:

Investment income from property you own

or

Royalty income from your business.

It's not the first so I choose the second. However, then I have to go through a bunch more paperwork because "I have a business", which I really don't. It also shifts the MISC form to another category. Is this the proper way to file royalties on a book? I going the business royalty route, it asks me for business name, don't have one and other questions that don't really apply so a bit confused.

Here are the two options in Turbotax and neither one apply:

Sources of Royalty Income

Investment Income includes amounts received from oil, gas or mineral properties when natural resources are extracted from your property. These royalties are based on units, such as barrels, tons, etc., and are paid to you by a person or company that leases the property from you. You may be eligible for a depletion allowance. Royalties from intellectual property (patents, copyrights, trademarks, etc.) are only considered investment property income if you are not in the business of creating such works. For example, you could purchase a copyright or inherit the right to receive royalties from a literary work. In these cases, this income would be investment income. But an author or inventor would not typically treat income from copyrights or patents as investment income.

Royalty Income from your Business includes royalty payments received by authors, inventors, or artists; natural resource properties that you operate; or freelance or contract work. Choose this for income from oil, gas or mineral properties if you own and operate the property. If you are a self-employed writer, inventor or artist, receiving royalty income from patents, copyrights on literary, musical, artistic works, etc., then you need to report this as Business Income.

[RobertB4444]

Unfortunately, you do have a business.  Your business sells books on Amazon and you're paid royalties for that.  

Whether it is a successful business is a whole other animal.

You are correct to enter the amount received as royalties if you want to be able to deduct any expenses directly related to the creation of the books you're selling.  

If you have no interest in deducting expenses then you can just enter this as 'Other Income' which would be box 3 of the 1099-MISC.  It will place the amount on schedule 1 of 1040 that way and you will pay taxes on the full amount.

@billmcse 

[billmcse]

I have no business deductions to enter nor am I itemizing so that would be my next question - can I just enter this as Miscellaneous other income even though the form says 1099-MISC?

[JohnB5677]

You can enter the 1099-MISC just as it is.  The key is how you enter the follow-up questions.

To determine if your 1099-MISC is subject to self-employment tax, or if you have to file a schedule C will require you to answer all of the questions in the interview. 

Many of the questions have examples or additional information that will help guide you in the process.

1. Click on the Federal tab.
2. Click on Income & expenses.
3. Scroll down to Less Common Income.
4. Click on Start or Update button Miscellaneous Income, 1099-A, 1099-C
5. On the next screen (Let's Work on Any Miscellaneous Income), click the Start or Update button for Other reportable income.
6. Continue the interview. Does one of these apply? 
7. Select None of these apply. - Continue
8. Does this involve work like "Your" main job? - No
9. How often did "You" get income for this?  Enter all that are appropriate.
10. Did this involve an intent to earn money?  See examples if in doubt.
11. These questions will determine if your 1099-MISC is taxable.

The income will be reported on Schedule 1 line 8 (z) with the description that you entered.