It depends. You have a couple of options.
- If you do not see an entry for depletion you can add another Schedule E to record only the depletion since the royalty comes from a K-1.
- Or you can simply reduce the K-1 royalties by 15% depletion expense
- Or you can remove the royalty from the K-1, enter it in Schedule E and add your depletion expense at the same time
- Gross royalty x 15% = depletion
- Gross royalty - depletion - taxable amount of royalty
Search (upper right) > Type schedule e > Click the Jump to... link > Enter your royalty property (either step 1 or 3)
@tpclark
@billcw98
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