Deductions & credits

Yes, you may still owe federal taxes on the sale of mineral rights. The buyer was not required to send you Form 1099, but many still do. The IRS doesn't require 1099-S or 1099-MISC for the sale of mineral rights. But you are still required to report the proceeds on your tax return. Enter this as the sale of an investment (Schedule D).

Here is how to report sale of inherited mineral rights:

1. Open or continue your return (you can choose the Search box and type 'sale of second home' then use the Jump to link to enter your inherited sale) or follow the menu.
2. Under Wages & Income scroll to Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)
3. Answer Yes on the Did you sell any stocks, mutual funds, bonds, or other investments in 20XX? screen
   • If you land on the Your investment sales summary screen, select Add More Sales
4. On the OK, let's start with one investment type screen, select Other, then Continue.
5. On the Tell us more about this sale screen, enter the name of the person or institution that sent you the 1099.
6. On the next screen, select Other (choose this also for inherited homes) then select I inherited it under How did you receive this investment?
7. Enter the other information as needed. The date acquired is not necessary for the sale of inherited property because it is always considered long-term.
8. Continue back to the investment sales summary.

If you see "Needs Review" or get a message from SmartCheck, simply complete the requested information in fields that are highlighted.