Was the income reported as in box 2 of the IRS form 1099-MISC?
If so, then enter ‘royalty income’ in Search magnifying glass in the upper right hand corner of the screen.
Click on ‘jump to royalty income’.
You are correct. There are two options:
- Investment income from property you own – This includes natural resources extracted from your property by a third party who leases your property, as well as royalties from intellectual property that you didn't create yourself. This gets reported on Schedule E.
- Royalty income from your business, including artist royalties or operating a natural resources business (Schedule C) – This includes income from natural resources that you extract from your property as well as royalty payments from intellectual property you created as an inventor, writer, artist, and so forth. This gets reported on Schedule C
Investment income includes amounts received from oil, gas or mineral properties when natural resources are extracted from your property. These royalties are based on units, such as barrels, tons, etc. and are paid to you by a person or company that leases the property from you. You may be eligible for a depletion allowance.
Royalties from intellectual property (patents, copyrights, trademarks, etc.) are only considered investment property income if you are not in the business of creating such works. For example, you could purchase a copyright or inherit the right to receive royalties from a literary work. In these cases, this income would be investment income.
Does your income qualify as investment income?
Make the selection of the type of royalty income at the screen What type of royalty income?
See also this TurboTax Help.
[Edited 2/16/2023 | 9:03 am PST]
@Jennypenny
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
