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14 year old dependent child receives a 1099-Misc for $1800.00 in royalties from a youtube channel. Should this be reported on Schedule C as earned income and deduct the costs of camera equipment etc or be reported on schedule E as royalties? If reported on Schedule E as royalties can camera equipment be written off?
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C
Slava Ukraini!
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I'm always proud of myself when I can provide an answer in less than two letters.
Slava Ukraini!
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My state CPA society has a tax forum. I tried to post one of my short Yes answers. The system told me my answer had to be at least 5 characters.
The more I know the more I don’t know.
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They obviously have a defective system.
Slava Ukraini!
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You betchum!
Answers are easy. Questions are hard!
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Obviously.
The more I know the more I don’t know.
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"can camera equipment be written off?"
In either example you provided, what you did not provide is information about the camera equipment. Typically, it is too expensive to "write off." Make sure to learn about Assets and Useful Life and Depreciation, as well as Safe Harbor, for your client.
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All cost under$2500
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When I see stories about precocious children I always wonder if there are parents in the background who are precocious with assignment of income. How much of the work is being done by the kid, and how much of the video production is engineered by adults? Or is this like those commercials by Dandy Dealer Dave, your favorite used-car lot owner, who puts his kids on camera and pays them some of the company profits for being so cute people will want a used Chevy?
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in this particular case I know the child is the one taking videos with his GoPro and drone and does all of his own editing. He called me himself about his taxes. His parents monitor comments and give him guidance on responding to comments.
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"I know the child is the one"
Schedule C, because actively operating and not just benefiting from content existing, such as on-screen advertising.
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"His parents monitor comments and give him guidance on responding to comments."
Hey, that might be a great idea elsewhere, too!