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Level 2
posted Apr 14, 2020 10:35:53 PM

Phantom royalties?

On the final federal check, TurboTax tells me that "Sch E worksheet link must be established. Royalty income and expense is reported on Sch E..." I don't have any royalty income or expense, so I enter 0. But the same question keeps popping up over and over. Why?

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1 Replies
Employee Tax Expert
Apr 15, 2020 5:11:00 PM

Royalty income would be reported on a separate schedule E. You may have one being pulled over from the previous year, or you may have royalty income reported on a K-1 form, that then needs a schedule E.

 

I suggest you look for the schedule E in your list of forms and schedules in your program and delete it. If it comes from a K-1 entry, after you delete it, it will just re-populate itself. In that case, you need to go back through the K-1 entries to find the royalty income (box 7 on partnership K-1) and make sure you answered the questions correctly on the K-1 entry.

 

You can delete a form in TurboTax as follows:

 

1. Find the Tax Tools option on your left menu bar and click on it

2. Click on Tools

3. Find Delete a Form and click on it

4. Look for the Sch E in the list of forms and click on the option to delete it

 

Just make sure you don't delete the wrong schedule E, if you have more than one of them!