Re: You should report the gross amount, then deduc...
Level 15

Investors & landlords

From my perspective,

Perspective doesn't count. Only results matter.  While it is possible the 1099-MISC is wrong, I doubt it.

In the box for "Royalty Income from checks, cash or 1099-MISC" the amount you enter there *must* include the amount reported in box 2 of the 1099-MISC. *period*.

In the box for "Taxes Paid" total up the amounts in boxes 4, 16 and 17. Add that total to any other taxes you paid on the amount of this royalty income, to any other taxing authority and enter the amount.

Then on the next screen will be the depletion already entered and figured for you. On that same screen is a button for "more expenses". Click it and enter any other expenses associated with this royalty income. Work it through to get to the Royalty Summary screen. From there you can enter more expenses. It's perfectly possible that the royalty payer may have paid some expenses "on your behalf" and you would be able to deduct those expenses from the royalty income on your tax return. I detailed report from the payer should clear it up.

 

 

 

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