Where to report Patent Royalties (only Box2) on 1099-misc received as inventor from the same employer/university. I don't belong to self employed category.

[Leonard]

Royalties are reported on Schedule E.  The link below has information on reporting Patent Royalties.

https://ttlc.intuit.com/replies/4792182

[Michael8383]

In the context of this question the individual holding the 1099-MISC is reporting monies received from a university as a listed inventor of a patent created while employed with the university.

While the University is distributing funds as a portion of Royalties, (and may include totals in box 2 - Royalties of the 1099-MISC) the university is the sole owner of the patent and the inventor does not own any percent of the patent rights.

TurboTax does not allow an individual to list royalty payments on schedule E when the individual has 0% ownership of the patent. Does this mean the income should be claimed as "other income" instead?

[ShirlynW]

Yes, The income should be listed as "Other Income." Here are the steps:

1. Sign into TurboTax.
2. Pick up where I left off.
3. Wages & Income > Other Common Income > Form 1099-MISC > Start / Revisit.

   4. On the screen, "Did you get a 1099-MISC?" answer "Yes."

   5.  Enter the 1099-MISC.

  6.  Complete this section.

[pacmanwa]

Ok I did that... now I get this when I try an submit my taxes. How do you fix this?

[AbrahamT]

In that case, this is where you will enter it

Personal Income then,

Less Common Income then,

Misc Income

then Other Reportable Income  then,

Description  Royalty Income and Amount like this

[pacmanwa]

"Do not enter income reported on Form 1099-MISC"

This feels confusing... why do we not have return free filing like other countries?

It doesn't let me enter my employer's TIN.

[AbrahamT]

The bottom line is that it will show up as Other taxable income/ subcategory Royalty income and you will end up being taxed on it regardless. See here

 

which will show up here, Sch 1 Line 8z

And finally on Line 8 of the 1040 thereby creating the same result as if you entered it through the 1099MISC.

Keep a copy for your records so that it can be explained if you run into an issue down the road.