Band Wants to Add New Members

Dear Rich: I'm in a band that has an incomplete lineup at the moment. Right now it is just 3 of us (2 guitar players, 1 drummer). We have a good handful of songs fully written and arranged. In the meantime, we are still looking for more people to join. How would it work if we go about copyrighting our music now just to get out there as a trio? I know when you file a copyright, you can always add to it later but is there a way to make the three of us principal songwriters and have the rest of the band (once it's completed) still get credit for the music later on?
Copyright is automatic so once your trio creates a song (song copyrights) or records an album (sound recording copyright) the three members are all co-authors and co-owners by default (assuming that all three contributed to each effort). If you filed copyright applications for either the songs or the sound recordings, you would list the three contributors as the "authors."
When you add a fourth member ... You should not revise an existing registration (or file a new one)  unless the new member modifies one of your existing songs or recordings -- for example, a bass player helps you modify an existing tune by composing a new chorus and bridge. You can always share revenue from existing copyrights with new members -- for example paying them song royalties for songs written before they joined the band but that doesn't require modifying the copyright information for existing copyrights. We recommend that you create a band partnership agreement to best deal with adding new members (and we explain how do that in our Music Law book).

When Can Inventor Claim Net Operating Loss?

Dear Rich: My co-inventor and I have a partnership and we've spent a few thousand dollars working on an invention. Can we deduct our losses from the partnership's income tax return, or do we do it individually on our separate returns? First, let's address the animated GIF issue. As we have indicated previously, we're caught up in something that's apparently difficult to control. We know the effect cheapens our blog and makes it seem as if we are now accepting banner ads from car insurance companies (which, hey, we're not against doing if the numbers worked out). But these days when we reach in our mailbag, our overriding criteria for choosing a question is whether it lends itself to a GIF. And our holy grail is to find a question that we can answer solely with an animated GIF. Stay tuned!
Right, you had a question. We're not tax experts but we do know enough about taxes to tell you that a partnership's return is "informational" and that a partnership is a "pass-through" entity, which means that the profits and losses pass through the partnership to the individual owners. Whether the partners can deduct a net operating loss (NOL) depends on your ability to show the IRS that your inventing activities are a business, not a hobby, that you  keep accurate records of your expenses, and that you have a legitimate legal basis for your deductions. Assuming you can do that, you may be able to use your NOL deduction either going forward (in future tax years) or apply it against past returns. There's more on NOLs in this IRS booklet and we've also got an article explicitly on the subject of  NOLs and inventors.