Thank you, Patricia. Your instructions are clear and helpful. I did as you suggested and separated the single 1099 MISC form that I received with both box 1 and box 2 amounts into two forms in TurboTax. One is for royalties (box 2), and the second reports the one-time bonus listed in my box 1 as box 3 in the Turbo Tax form. I partitioned the state taxes withheld between the two forms as previously mentioned.
One potential problem with this approach is that I no longer see the prompt to report and deduct legal fees that I previously used when I treated the box 1 format as a rental. There was a significant legal fee applied to the signing bonus. How can I record that?
