The Author, the IRS and Prepublication Expenditures

Authors

David Walton

Abstract

Authors have customarily deducted expenditures incurred in preparing a book for publication. The IRS has taken the position that such expenditures should be capitalized and then amortized. In the recent case of Faura v. Commissioner, the Tax Court allowed authors to deduct prepublication expenditures rather than capitalize them. In 1976, section 280 was added to the Internal Revenue Code by the 1976 Tax Reform Act. This section appears to require authors to capitalize prepublication expenditures for books. The Tax Reform Act of 1976 also contained section 2119 which allows authors to deduct prepublication expenditures until regulations are promulgated concerning them. To date, there is no solid authority on whether an author should capitalize post-1976 prepublication expenditures.

Recommended Citation

David Walton, The Author, the IRS and Prepublication Expenditures, 4 UC Law SF Comm. & Ent. L.J. 465 (1982).
Available at: https://repository.uclawsf.edu/hastings_comm_ent_law_journal/vol4/iss3/5