Royalties are considered payments received as compensation for using or allowing the use of a copywright, patent, trademark or secret process as defined by CRA. When completing your personal income tax return, the amounts may be reported as other income. They can also be reported as income from a business whereby you may be able to deduct related expenses.
If you received my course Secrets To Writing Your 1st Children’s Book and wrote a book, your royalties would be taxed as business income. You could deduct the cost of your illustrator and any advertising and promotion expenses related to your book. Keep in mind, royalties will increase your total income and it may increase your tax bracket.