Please review the following information in regards to your two 1099-Misc forms for royalties inherited from your brother. You will need TurboTax Premier because a Schedule D is required by the IRS to report your investment income. When you enter your 1099-MISC, TurboTax asks about this income. Is it:
Investment income from property you own or
Royalty income from your business, including artist royalties or operating a natural resources business (Schedule C)
The Learn More link in blue in TurboTax Deluxe says the following about whether it is investment income or Royalty from your business etc.
Investment Income includes amounts received from oil, gas or mineral
properties when natural resources are extracted from your property. These
royalties are based on units, such as barrels, tons, etc., and are paid to you
by a person or company that leases the
property from you. You may be
eligible for a depletion allowance. Royalties
from intellectual property (patents, copyrights, trademarks, etc.) are only
considered investment property income if you are not in the business of creating
such works. For example, you could purchase a copyright or inherit the right to
receive royalties from a literary work. In these cases, this income would be
investment income. But an
author or inventor would not typically treat income from copyrights or patents
as investment income.
Royalty Income from your Business includes
royalty payments received by authors, inventors, or artists; natural resource
properties that you operate; or freelance or contract work. Choose this for
income from oil, gas or mineral properties if you own and operate the property. If you are a self-employed writer, inventor or artist, receiving royalty
income from patents, copyrights on literary, musical, artistic works, etc.,
then you need to report this as Business Income.
Because investment income applies to your situation, TurboTax Deluxe goes on to say:
·
Schedule
D is required by
the IRS to report your investment income or losses, which is covered by
Premier.
·
Premier gives you
step–by–step guidance to complete Schedule D to report the sale of any stocks,
bonds, and mutual funds.
·
Premier also
automatically calculates cost basis to help you make the most of your
investment income.
·
TurboTax Deluxe
doesn’t cover your tax situation.
The correct version of TurboTax is TurboTax Premier for your situation.
