Thank God I'm a Country Boy

Why Country Songwriters Now Get Capital Gain Treatment for Their Music

Published in Practical US/Domestic Tax Strategies by Joseph B. Darby, III (Greenberg Traurig LLP)

As a tax lawyer, my professional life has the elements that my grandfather believed were essential to a really good job: indoor work, no heavy lifting.

In fact, there are only three things that I do as a tax lawyer. I help taxpayers (1) avoid income, (2) defer income, and (3) convert ordinary income into long-term capital gains. That’s really all there is to it, other than reading and understanding the Internal Revenue Code. All in all, as I said, a pretty cushy existence.

However, late at night, after everyone else has gone to bed, I sometimes wish I had time for one other important thing: I wish I had time to write country-western songs. You know the type of songs I’m referring to: mournful ballads sung with a twangy drawl, about how my old dog done died, and my new dog won’t hunt, and the finance company repossessed my truck, and my dern wife done run off with the guy from the finance company in my old truck, and my 12-gauge shotgun was in the back of the truck they took so I kain’t shoot no one, and my latest batch of homemade whisky just kilt four of my few remaining friends and blinded the rest, so there ain’t no one left who can see that I’m all tore up inside.

That’s what I call music.

Unfortunately, country songwriting is a tough racket, and so I have stuck until now with the practice of law, with the occasional tax or sports article on the side. The problem was that, until recently, all income from writing activities was taxed at ordinary federal income tax rates. There was no percentage in that kind of work, I figured.

You can imagine my amazement, therefore, when country songwriters managed to convince Congress in 2005 and 2006 that their creative endeavors deserved a special tax dispensation and that the sale of a copyright in a song is no longer ordinary income, but rather can be taxed at favorable capital gains tax rates.

This is a story worth telling. In fact, I may even write a song about it.

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