Authors' expenses & Charitable Contr.

[Bird Legs]

Client, a retired minister, wrote his autobiography. Paid all expenses himself, including
the editing, supplies, printing, etc. This was over a period of several years. The book is
being sold through his national church association, with all proceeds going to a poor, overseas church & school. Same denomination. How should the expenses be accounted
for? Personal, charitable contri., Business expense, don't see how this would be, just
thought I would add it. Clients total expenses over the several years would total
around $11,000.
Any thoughts on this will be greatly appreciated.

[Chief]

Expenses for Minister Author

I guess my first question would be: Why were these expenses not taken in the year they happened?

Now that the minister is claiming the income from the book as a charitable contribution it would seem that somehow the expenses could also be taken as a charitable contribution
as well as the income from the sales.

His church denomination most likely is on the approved list of organizations. Also most likely the total of these contributions is more than $500 requiring the use of Form 8283. If the total is more than$5000 this transaction may also require an independent appraisal of the gifts (IRS pujblication 526).

It is my personal belief that you could go back and deduct the cost of the expenses if they have not been claimed.

[Mark Goldberg]

Disagree re Amending

My feeling is the minister was not previously in the business of writing books. Clearly he wrote the book without a profit motive. So expenses were not deductible when paid. As for what you do in this situation, I have no idea.

[jainen]

if they belong to him

If he assigned his 100% of his copyright to the church he could deduct the value of the copyright or his basis (the capitalized $11000 expenses), whichever is less. The only way he can deduct sales revenues as contributions is if they belong to him, in which case they are taxed as ordinary income net of current expenses.

[Bird Legs]

Mark, you are

correct. There is no profit motive. Since the original post, have found out that the client
does want to recover some of the expenses he had, but the majority of the profits & sales
proceeds would go to the overseas church & school in Bolivia. He is wanting enough
profits in order to buy some computers for the school. They are very poor.
Yes, this is a 501(c)(3) church, Methodist, and the church has outreach programs
all over the world.
And no, the client, retired minister, has not previously authored any books. This is
the one & only. He is now 84 years young.
Thanks for your responses and help in this.