USA Fully vested stock in lieu of cash for Royalties


Joined
Feb 11, 2019
Messages
2
Reaction score
0
Country
us
I have a contract for use of my invention (patented) with a privately-held very small start-up corporation. The payments are royalties. In 2018 I received $10k cash payments for the royalties in the first half of the year, but agreed to take $10k in the form of the corporation's stock (fully vested) for the second payment of the year.

1. What should I expect the 1099 MISC from the corporation to look like (what figures in which boxes)?
2. I still have the stock, which has not really had a change in per share value. How do I treat the "in lieu of cash" money on my 1040 Schedule C?
 

kirby

VIP Member
Joined
May 12, 2011
Messages
1,507
Reaction score
210
Country
us
For question 1, the 1099 should show 20,000 in box 2 "Royalties".
For 2, before you go there check with a tax pro on whether you should make an IRC 83 b election.
 
Ad

Advertisements

Joined
Feb 11, 2019
Messages
2
Reaction score
0
Country
us
Thank you for your reply.

I believe that the 83b election must be completed within 30 days of accepting/receiving the stock so it's too late for that.
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top