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February 23, 2023
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Have gas lease royalties, after filling tax form out it says qualify for small business discount form 8995. I have no business how is this possible.

  • February 23, 2023
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Best answer by PatriciaV

You may wish to return to the Rental and Royalty Summary page and review your entries. First confirm that you checked the box under Property Profile for "Royalty property" and checked the line for "Oil and Gas Royalty Income" for the question "What Type of Royalty Income?"

 

Entering expenses for a Royalty property is appropriate, including property & production taxes and depletion. Reporting expenses does not imply this is a business.

 

From the Property Summary page, click Done with Royalty Property at the bottom. Continue through the intervew to the page asking "Is This Qualified Business Income?" You have the option here to check the box for "No, this income is not qualified."

1 reply

February 23, 2023

Please clarify. 

  • What form is your gas lease royalties reported on, 1099-MSIC or 1099-NEC? 
  • Do you hold an operating oil, gas, or mineral interest in land?
  • What form is TurboTax generating that the gas lease royalties are being reported on, Schedule E or Schedule C?
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jkhometAuthor
February 25, 2023

Gas Royalties are sent to me on 1099-Misc, Royalties are listed on Schedule E, I own one property that the leases are on so I listed depletion, taxes and Insurance. Form 8995 pops up and says I had Qualified Business Income Deduction. I do not have a small business and have no employees. Deleting depletion, taxes and Insurance from Schedule E does not get rid of Form 8995. it still shows royalties and gives Business Deduction.

 

 

PatriciaV
PatriciaVAnswer
Employee
February 26, 2023

You may wish to return to the Rental and Royalty Summary page and review your entries. First confirm that you checked the box under Property Profile for "Royalty property" and checked the line for "Oil and Gas Royalty Income" for the question "What Type of Royalty Income?"

 

Entering expenses for a Royalty property is appropriate, including property & production taxes and depletion. Reporting expenses does not imply this is a business.

 

From the Property Summary page, click Done with Royalty Property at the bottom. Continue through the intervew to the page asking "Is This Qualified Business Income?" You have the option here to check the box for "No, this income is not qualified."

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"