1099-NEC

Forum|Forum|1 year ago
March 22, 2025
1 reply
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I received a 1099-NEC from an energy company for oil and gas lease. Why is this a sole proprietorship? I don't know how to answer this questions on the Schedule c. My information or the Energy companies?

DianeW777

This should be reported as rental income and the Form 1099-MISC would have been the correct reporting form is you are not actively participating in the extraction of gas or oil.

First delete the form and then follow the instructions in the link to report the rental or royalty income. Royalties only occur if the extraction is actually taking place. Rental income is the category if there is a lease, without action of extraction right now.

Where do I enter income and expenses from rental property?
There may be no expenses is there is no extraction yet. Once extraction begins and the income is royalty, you would be allowed a 15% depletion allowance.

Delete this form --1099-NEC----.

If you're using TurboTax Online software and need to delete a form, click here.
If you're using TurboTax Desktop software and need to delete a form, click here.

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Anne61Author

I reached out to the company and they say the 1099 nec is correct because I am a working interest owner but gave me no guidance on how to fill out a schedule c which turbo tax makes me do.

Anne61

Vanessa A

When you enter the 1099-NEC, TurboTax will walk you through the questions needed to fill out the Schedule C. If you walk through the questions step by step, the form will be filled out for you.

If you have no expenses to report, then it is as simple as just filling out the 1099-NEC.

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