QUESTION

How do I classify settlement and royalties, Schedule C or Other Income?

Asked on Dec 08th, 2014 on Taxation - California
More details to this question:
I'm a writer. A publisher paid me a settlement for infringing my work. They also paid me retroactive royalties on the work (what I would have earned had I licensed the work to them legally). I allowed them to continue selling the work, and they have been paying me current royalties as they were earned. I assume that all the royalties (retroactive and current) will be reported on Schedule C. But should I report the settlement portion of their payment on 1040, "Other income"? Thanks.
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1 ANSWER

Taxation Law Attorney serving Glendale, CA at Irsfeld, Irsfeld & Younger LLP
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I think you should include it on Schedule C.
Answered on Dec 09th, 2014 at 3:05 PM

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