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I have books that generate royalties. I am using the QBI since I do for profit and it is what I do. I have included ads as part of expenses but I am also having a book review service where aside from a monthly fee, I buy books of other authors in order to receive credit and request reviews for my books. I think the monthly fee is an expense but buying other people's books, could it be seen also as an expense given that without it I cant get credit to have my book reviewed?

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The tax law is all about facts and circumstances. The IRC Sec. 162, which is the legal basis for deducting expenses related to the income-producing activity, doesn't enumerate every possible expense. Instead, it says this:

There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business

So, the question boils down to "ordinary and necessary". Is it ordinary? Is it necessary? If you can convince the IRS that the answer to both the questions is "yes" then you can take the deduction.

Can you convince the IRS? You'd probably want to discuss this with an experienced tax professional/attorney who's familiar with your specific trade and the rules and precedents around it.

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  • Thank you, this is great!
    – Michael
    Commented Feb 1 at 18:43

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