Sch E royalty expenses are more than income received

[hgtc]

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.

[sjrcpa]

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

[loricpa100 · Accepted solution]

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.

[hgtc]

good suggestion.  I will ask him for more detail about this patent activity.  thanks.