I am entering my 1099 misc. for royalties from mineral rights. I don't know if I need to click investment income or royalty income. I don't own the land or a business

Forum|Forum|6 years ago
June 4, 2019
3 replies
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just the mineral rights.

TurboTax Premier Online

Best answer by PaulaM

Enter under the Rental Properties and Royalties section. You don't have to own the property and this is the section it belongs in.

Navigate to the section and answer questions regarding the property, then enter the 1099-MISC (gross amount) in the Royalty summary.

Note: Be certain to deduct any production taxes, depletion (15%) and any other expenses you have. You will only want to pay taxes on the net amount you received, not the 1099-MISC gross. Any additional depletion that your state may allow (OK does) will be an adjustment under your state taxes.

PaulaMAnswer

Employee

Enter under the Rental Properties and Royalties section. You don't have to own the property and this is the section it belongs in.

Navigate to the section and answer questions regarding the property, then enter the 1099-MISC (gross amount) in the Royalty summary.

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UserGK

If possible, I could use a little more clarification on this process... I understand that the information (gross, taxes paid, state tax withheld, etc.) from my 1099-Misc needs to be entered under the “Rental Properties & Royalties” mentioned above, but I am still confused with the 1099-Misc path under the “Other Common Income” section.

My main question is, do I need to enter my 1099-Misc info into the “Other Common Income” section first, then proceed to complete the “Rental Properties & Royalties” Schedule C section that was auto generated? OR... Can I just skip the 1099-Misc section under “Other Common Income” section, and just use the path under the “Rental Properties & Royalties” section instead.

I ask because the ”Rental Properties & Royalties” path does not ask for any information about the payer like the 1099-Misc “Other Common Income” path does. Can you please clarify, as I have read other answers that seem to instruct other users to only follow the ”Rental Properties & Royalties”.

Thank you in advance!

DaveF1006

Yes, enter this 1099 MISC under other common income and enter all the information in the 1099 MISC exactly the way it is listed on the form. It will eventually lead you to the Schedule E Rental and Royalty section where you would record the remaining information that is required.

Because of the IRS has already received a copy of your 1099 MISC from the payer, this is the only way to report it so that your 1099 MISC will match what the IRS has on file.

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Carl11_2

Employee

When you have a 1099-MISC, then depending on what box the income is in (box 2 in your case) it may appear in multiple locations in the program. That's perfectly fine "provided" you entered the form correctly and work it through the correct section. In your case, that's the Rental & Royalty Income (SCH E) section of the program.

LenaH

First, you must enter your 1099-MISC in Box 2 (assuming that is the box in which you is showing your royalty income). On the next screen, choose Investment income from property you own as the source of your 1099-MISC. Although you do not own the property, you have mineral rights and receive royalty income from the property rights you have inherited.

Investment Income includes amounts received from oil, gas or mineral properties when natural resources are extracted from your property. These royalties are based on units, such as barrels, tons, etc., and are paid to you by a person or company that leases the property from you.

TurboTax will then create a Schedule E on your tax return. Schedule E is the Rental and Royalties section of your return that was referred to previously. Once you enter the address of the property in which you own mineral rights, you will select Oil and Gas Income and be able to enter any expenses relevant to this income.

@donnatilus

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cmp102

When it asks for a street address, there isn't one. It is just acreage that I have the mineral rights for. What should I do next?

JillS56

You do not need to enter a specific street address for Royalty Income. TurboTax wants you to enter a description of the Royalty Income. You could simply enter "Mineral Rights" and the location can simply be the town and state where the property is located.

@cmp102