Box 2 on the 1099-MISC are income from royalties and should be reported on Schedule E, not as capital gains. To report, follow these steps.
- From the Federal menu on the left, choose Wages & Income
- Expand the menu for Rentals, Royalties, and Farm
- Click Start/Revisit next to Rental Properties and Royalties (Sch E)
- Answer Yes to Do you have any rental or royalty income and expenses in 2019 for property you own? Patents are included in intellectual property.
- Click None of the above on the Let's See if You're a Real Estate Professional and click Continue
- On the next screen, Is This a Rental Property or Royalty, choose Royalty property or payment
- Enter the information and click Continue
- When you come to the screen, What Type of Royalty Income?, choose Other Intangible (Patents, copyrights). Click Continue
- When you get to the Royalty Summary screen, click Start/Revisit next to Royalty Income to enter your 1099-MISC
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