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Level 5
April 3, 2020
Solved

Sch E royalty expenses are more than income received

  • April 3, 2020
  • 1 reply
  • 19 views

A doctor received royalty incomes on certain products he invented.  On schedule E, his total royalty related expenses are more than royalty incomes received.  Are losses tax deductible?

And, is this type of royalty incomes passive or non-passive?

 

Thanks.

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Best answer by loricpa100

I agree, often Royalties from professionals (especially within their line of specialty knowledge) go on Sch C - and then you can take the loss.  If you keep them on E you will be limited.

1 reply

sjrcpa
Level 15
April 3, 2020

What kind of expenses? Are you sure this goes on Schedule E and not Schedule C?

The more I know the more I don’t know.
loricpa100
Level 5
April 3, 2020

I agree, often Royalties from professionals (especially within their line of specialty knowledge) go on Sch C - and then you can take the loss.  If you keep them on E you will be limited.