How and where do I enter a Section 197 intangible asset in Turbo Tax and capture its amortization? I have Turbo Tax Deluxe.

[Coleen3]

If you have a Sole Proprietorship you will need to update to the Self-Employed Edition.

• Start or Update Depreciation of Assets, and answer Yes to the next screen. 
• Then select Add An Asset. Enter the trademark name and the date you acquired it on the Tell Us About This Asset Screen. 
• On the Describe This Asset screen, select Other. 
• On the Tell Us a Little More screen, select Amortizable Intangibles. 
• On the next screen, enter the amount you paid for the trademark. Do not check the box for This asset was new... 
• What kind of intangible is Section 197 intangibles. TurboTax does the rest.

[Maria-ME]

I have sole prop and I'm using the QB & TurboTax Self-Employed Bundle and I too need to know... 'how and where to enter a Section 197 intangible asset in Turbo Tax and capture its amortization?' 

I'm not understanding the solution to "update the Self-Employed Edition". Is the process different for the bundle software I purchased this year?

[MaryK4]

You do not need to upgrade if you already have the Self-Employed- that only applies if you had the TurboTax Premier or TurboTax Deluxe.  The Update instruction only apply if you had already went through that section. @Maria-ME

[Jelvmoore]

I have the "DISC" version of TURBOTAX "PREMIER" and "BUSINESS".  The PREMIER version has allowed me to create a SCH-C for my OIL/GAS BUSINESS (new for me this year).  I thought that I would need to upgrade to "SMALL BUSINESS" version but maybe not.    I am also curious where to input my "INTANGBLE DRILLING COSTS" data provided by the drilling company on my invoices.   I read that "INTANGIBLE" drilling costs my be taken in full or depreciated over 7 years.  I also hear that the "TANGIBLE" drilling costs must be depreciated over 7 years, but again I'm not sure where to enter that data either.  

[Jelvmoore]

I am also unclear about SECTION 179.  Some posts state that the ASSET must be "TANGIBLE".  It seems that some of these posts are discussing taking "INTANGIBLE" assets on SECTION 179.  So what is SECTION 179 and how is it used?  Would it be appropriate for OIL/GAS deductions, intangible or tangible?

[VolvoGirl]

I don't know where to enter that stuff but for your personal return you can use any version.  All the Desktop programs have the same forms. You just get more help and guidance in the higher versions.   

Why did you also buy Business?  Do you need to file a separate Business or Estate/Trust return?

[Jelvmoore]

I see on TURBOTAX form Sch-C line items 12, "DEPLETION", and line item 13 "DEPRECIATION and SECTION 179".   The "walk me through everything" method has not filled anything in those columns.  For now I have put my INTANGIBLE DRILLING COSTS in "MISC DEDUCTIONS.  Not sure about that either.  Suggestions?

[Jelvmoore]

Well, actually I put that amount on LINE 27a "Other Expenses"

[LeonardS]

Could you please clarify did you receive Form K-1 to report your Intangible drilling cost.  Or are you the owner-operator of the drilling rig?

[Jelvmoore]

No K-1, just a 1099-Misc with info in box 2 and box 3 for from 1 drilling company with whom I have working interest and participate in the drilling cost.  I have working interest with another drilling company and received an 1099-NEC from that well investment but “non-participating” owner.  It is my understanding that these incomes should be reported as SELF-EMPLOYEED (SE) business form SCH-C.  

[Jelvmoore]

Drilling costs were reported on the INVOICES paid to the drilling company.  The invoice lists all the charges in categories as “INTANGIBLE” and “TANGIBLE” sub-totals.

[Jelvmoore]

NOT the owner of the drilling company, just a participating mineral rights owner.

[Jelvmoore]

Having “working interest” in our wells in new this year.  We have historically just signed lease agreements and received royalty payments reported in 1099-MISC without having to report a SCH-C for them.

[Jelvmoore]

Having “working interest” in our wells is new this year.  We have historically just signed lease agreements and received royalty payments reported in 1099-MISC without having to report a SCH-C for them.