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June 6, 2019
Question

My wife and I have a 1099-misc for rent on mineral rights. We don't own the land but just have the rights to the minerals below ground. How do I classify this?

  • June 6, 2019
  • 1 reply
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Since we don't own the land it isn't real estate

1 reply

Employee
June 6, 2019

If mineral rights have been separated, you do not own the land, only access to develop the mineral rights.

You generally report royalties in Part I of Schedule E (Form 1040). Oil, gas, and minerals. Royalty income from oil, gas, and mineral properties is the amount you receive when natural resources are extracted from your property.

Box 2 of Form 1099-MISC is reserved for tax reporting related to royalty payments.Part I of Schedule E (Form 1040){select royalty for this] Link to "investment"at the last screen of the 1099-misc section..

 Review the Schedule E in Turbotax after entering through the 1099 MISC incomes then you can enter things like production taxes, mineral property taxes, production costs, depletion, etc.["More expenses"  radio button generally on depletion screen.]

Box 1 of Form 1099-MISC is reserved for tax reporting related to rental payments.Part I of Schedule E (Form 1040)[select rental for this]  "select "Non business income from the rental of personal property or equipment