Hacker News Reader

I was writting a long answer but finally, I decided to simply quote:

> In the court's view, royalties are those items which constitute passive income, such as the compensation paid by a licensee to a licensor for the use of a Page 7 patented invention.

https://www.irs.gov/pub/irs-tege/eotopicd89.pdf

Also, as you say, some royaltie are active incomes. But Passive royalties exist.

View on HN

This article is about books. Book royalties are generally considered self-employment income, not passive income, under the tax code.

> However, if you hold an operating oil, gas, or mineral interest or are in business as a self-employed writer, inventor, artist, etc., report your income and expenses on Schedule C (Form 1040).

https://irs.gov/publications/p525#en_US_2021_publink10002292...

I guess writing a book is "labor" but "royalties" out of it are passive income, I guess it's a mix of both. But Royalties cannot be achieved in that case without the Labor of writing the book

Well, and passive income from the stock market can't be achieved without the labor of picking the stocks...

True but this is not as much work as writing a book, moreover it could turn out as a liability if the stocks go down.

Same for bank investments, except for inheritance (but someone had to work).

Reply on news.ycombinator.com