Why am I getting an error when I report a 1099-MISC with both Rent and Royalty income?

Forum|Forum|2 years ago
March 16, 2024
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I received a 1099-Misc containing royalty and rent payments. When entering the information I keep receiving an error stating that I cannot put rents and royalties on the same Schedule E. The amount of the rents is less than $300.00; can I put that under other income? Also, where do I put production taxes. The 1099-Misc is for oil royalties.

Best answer by PatriciaV

Token No. 1212346

Here's the problem: both Schedule E's are marked as Royalty. One needs to be a Rental. Also, there's a hidden schedule E that cannot be edited.

Your best option is to delete all Forms 1099-MISC related to Schedule E, then report the income in the Schedule E interview. Delete them from the 1099-MISC topic under Income.

After you delete the 1099's, go to Rental Properties and Royalties. Delete the Royalty Property and confirm the hidden Schedule E is on the forms list.

Review the Property Profile for the Rental property to be sure the Rental box is checked. Also report that it was rented all year at a fair rental price. Then work through the rental interview to report the rental income from Form 1099-MISC. Add another 1099-MISC if you have more than one with rental income.

Continue back to the Rental and Royalty Summary page and Add Another Rental or Royalty - in this case, the royalty property you deleted earlier. Be sure to check the Royalty property box. Also check the box for Oil and Gas Royalty Income.

The income page provides a box to enter the total royalty income you received from all sources (including 1099-MISC). Agree to the depletion calculation and continue back to the summary page.

These steps should resolve the rent/royalty issue on your return.

@Rocky1023

mglauner

You make two 1099-Misc entries into TurboTax. One with the 'Rents' amount and the other with the 'Royalties' amount.

Production Taxes and Depletion are 'More Expenses' in the interview on the Schedule E reporting the Royalty income.

Here's more info on Reporting Royalty Income and Expenses.

Rocky1023Author

I made two 1099-Misc entries and I keep getting error messages. I spent about 20 minutes on the phone yesterday about this issue with someone from Turbo Tax, and he couldn't figure out why the errors kept coming up. That's why I want to know if I can just report the rent under other income.

PatriciaV

Employee

Please clarify what error messages you are seeing for these rent/royalty entries? It seems you have made the correct entries to split the 1099-MISC into two Schedule E properties.

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