Negative deduction amount on 1099 MISC

Forum|Forum|1 year ago
February 24, 2025
2 replies
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I have received a 1099 MISC for oil and gas royalties in 2024. The supplemental information shows a negative deduction amount for the year. My guess is that after auditing expenses over the past 3 years the deductions previously reported were over stated. I received the negative deduction amount in the form of a check this year, but it is not reported as royalty income in box 2 (I assume it is because it was previously reported in box 2 in prior years for the gross royalties), but rather as a negative deduction.

Turbo tax will not allow me to enter a deductions amount of less than $0.00. How do I handle this negative deduction?

PatriciaV

Employee

If the amount reported in Box 2 matches the actual income you received during the year, you would not need to report the negative adjustment.

However, if you received more than the Box 2 amount (royalties plus the refund of prior deductions), you would need to adjust (increase) the amount reported in Box 2 when you enter Form 1099-MISC.

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