1113. Writers Receiving Royalties

1113.1 Are writers engaged in a trade or business?

Writers who receive royalties may be engaged in a trade or business. Each case must be decided from the facts. A one-time venture of short duration is usually not a trade or business, but a repetition of such ventures would constitute a trade or business. Thus, if you write only one book as a sideline and never revise it, the writing activities would probably not be a trade or business. However, if you prepare new editions from time to time or write several books, the writing and editing activities would be a trade or business.

1113.2 Is writing in combination with other activities considered a trade or business?

You may engage in other related activities which, when considered together with the writing activities, may be a trade or business. For example, if you are a college professor who writes a book on business administration and gives lectures and advice to business groups on the same subject, you would probably be in a trade or business.

Note: For the effect of the receipt of royalties on the payment of benefits, see §1812 (W).

Last Revised: March, 2001