I receive oil and gas royalties that are distributed by an estate trust. As such, these royalties are reported to me via Schedule K-1 (form 1041). I recently learned that I am eligible to take depletion (using the 15% percentage depletion method).
Previously, I had reported this K-1 income under personal income>>Estate/Trust income>>Schedule K-1.
However, it looks like depletion must be recorded on Schedule E page 1, which is not generated when the K-1 is entered this way. Is it appropriate to record the K-1 income under business income? Does it get reported in both sections? Any help is appreciated!
