To report the income from Form 1099-NEC on Schedule E, you may enter this information under the Royalty Income topic and not under the section for 1099-NEC.
First, go to the 1099-NEC topic and delete (trashcan icon) the 1099-NEC that you have entered.
Now, go to your Royalty Properties for Schedule E and create (or edit) your working interest property. Enter the income from 1099-NEC for this property as "Other income." Note Schedule Line 3 has a box for "income not reported elsewhere." The IRS is more concerned that you report all income than with how that income is entered.
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