How do I deduct the cost to copyright material when the government doesn't issue receipts for copyrights?

Question

I have a business and I have spent a good amount of money to obtain copyrights on the work that I produce. I assume that I can deduct this as a business expense. However, the government doesn't issue me a receipt for this expense. How can I show proof to the IRS for this expense?

Answer 1

The only reason you would have for "deducting" the expenses of a copyright is if you're earning income from it. Otherwise, you don't get a deduction.

The government doesn't need to give you receipts to get the deduction, though. All you have to do is keep track of the costs and be ready to prove them. Bank statements, cancelled checks, money orders, etc., all qualify, and in the absence of receipts, you might still get away with reasonable (unsupported) costs if you can show that you were awarded the copyright.

What you do is you combine the total amounts that you paid to GET the copyright (anything directly related applies, just don't add travel, lunches, dates, and other silly stuff).

(You are also allowed to add any legal fees that you incur DEFENDING your copyright if you win.)

Add up all these costs and come up with a total. Then decide how long the copyright will be useful to you. If you decide you'll make money on it over a period of 20 years, you get to deduct 1/20 of total costs each year from your income on the copyright.

(Copyrights are good for life + 70 years, but your amortization period is going to be less than that. You will amortize it over it's USEFUL life, not over it's real life.)

Answer 2

Keep a detailed log of your expenses - I assume that since you have a business, you have some kind of accounting system. That, and your cancelled checks, would be proof.

Answer 3

Your canceled check or other proof of payment of the fees is sufficient.