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Book Signing and Profits

  • 1.  Book Signing and Profits

    Posted 09-02-2022 09:28 AM
    An author in our school community intends to direct all profits from an upcoming book to one of our endowed funds. Two questions:  

    1) In order for the funds to qualify as a charitable gift, must they come from the author (personal "check" after being paid) or can the funds come from the publishing company ("signed over") on an ongoing basis?
    2) What "did not receive gifts or services in exchange" conflicts might exist if the author holds a book signing on our campus?

    Thanks, everyone!
    --
    Lesley Cole
    Director of Advancement
    290 Quintard Road
    Sewanee, TN 37375
    Office:  931.463.2127

    "The most momentous duty of one generation to another is its education." -- David Bittle


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  • 2.  RE: Book Signing and Profits

    Posted 09-02-2022 10:04 AM
    A personal check is best.  The second option is fine as long as the publisher affirms that they will reporting the income to the author by way of a 1099.

    I don't see a problem with the book signing.  I assume you would let them do that without making a gift.

    John 

    John H. Taylor 
    919.816.5903 (Cell/Text)

    Big Ideas; Small Keyboard





  • 3.  RE: Book Signing and Profits

    Posted 09-02-2022 10:07 AM
    1 -  It depends! There are a few permutations:
    • The author has assigned to you the entire royalty interest to you and the underlying copyright. In this case, the author gets a tax deduction for the lesser of FMV and their basis, in the year it was donated. You receipt them in that year as a GIK. Payments from the publisher are non-philanthropic. This is generally a terrible way for an author to set things up, because of the very low basis an author (or painter, etc.) have in what they create. Note also that if the author only assigned they royalty interest, but not the copyright, it's a partial-interest gift and not deductible at all

    • The author has directed the publisher to send payments to you, but otherwise retains the rights to the royalties and copyright. This is basically an agency agreement. You'll want to confirm that the publisher is reporting the payments as income to the author, and that the instruction is to pay you, not to assign the royalty to you. You can then hard-credit the author, and they can take a tax deduction as usual.

    • The author has declined/waived the royalty interest in exchange for the publisher donating the royalty payments to you. In this case the publisher gets the hard credit. The author can't take a tax deduction, but also doesn't recognize any revenue. This is a suitable method for authors who don't itemize, since they get the same benefit as though they were getting a deduction, by simply never getting the revenue. 

    2 - If you only host signings for authors who make donations, that could be a problem, but assuming that you hold signings for other authors in your community, I don't see a QPQ issue here, especially since the monetary interest belongs to you, not the author/



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