Joel,
Thanks for putting in the time to help get to the bottom of this stuff. I too feel like most vague and unclear thing about all of this is how to claim our “Author Fee” as a deduction.
Also, something I thought I might add to the thread-
Are we to claim our income from 2015 using this “Author Fee” model, or will this only take effect starting in Tax year 2016? Even if that’s the case, won’t we need to make some effort to pay back taxes on “Author Fees” for years prior to 2016? Seems like there are many ways this could unravel…