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I was writting a long answer but finally, I decided to simply quote: > In the court's view, royalties are those items which constitute passive income, such as
by kahon65 4y ago
I was writting a long answer but finally, I decided to simply quote:
> In the court's view, royalties are those items which constitute passive income, such as the compensation paid by a licensee to a licensor for the use of a Page 7 patented invention.
https://www.irs.gov/pub/irs-tege/eotopicd89.pdf https://www.irs.gov/pub/irs-tege/eotopicd89.pdf
Also, as you say, some royaltie are active incomes. But Passive royalties exist.
- Namari 4y agoI guess writing a book is "labor" but "royalties" out of it are passive income, I guess it's a mix of both. But Royalties cannot be achieved in that case without the Labor of writing the book
- emteycz 4y agoWell, and passive income from the stock market can't be achieved without the labor of picking the stocks...
- Namari 4y agoTrue but this is not as much work as writing a book, moreover it could turn out as a liability if the stocks go down.
- kahon65 4y agoSame for bank investments, except for inheritance (but someone had to work).
- junar 4y agoThis article is about books. Book royalties are generally considered self-employment income, not passive income, under the tax code. > However, if you hold an operating oil, gas, or mineral interest or are in business as a self-employed writer, inventor, artist, etc., report your income and expenses on Schedule C (Form 1040). https://irs.gov/publications/p525#en_US_2021_publink1000229288 https://irs.gov/publications/p525#en_US_2021_publink10002292...