Do I need to claim $6 for oil royalties that I received? It's very confusing the questions ask about rental property, etc. I don't own property just oil rights?

 
DavidD66
Expert Alumni

Investors & landlords

You are required to report it; however, if you don't include it on your tax return, the IRS systems will add it to what you file, and if it has any impact on your tax owed they will send you a letter.  Given that it's only $6, that probably won't happen, and if it does it will only be $1 - $3.

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Investors & landlords

I don’t have a problem claiming it. But I get confused because then it asks questions about it being rental property, etc. And I don’t own the property. So don’t know how to answer the questions. It then makes me do extra schedules which in turn raises the cost of using turbo tax 

ColeenD3
Expert Alumni

Investors & landlords

Rentals and royalties are both entered on Schedule E, but have different places in the program to enter your information. The income should be in Box 2 of your 1099-MIsc.

 

Follow the steps below to get to the Royalty section.

 

  1. Search for Royalty and then click the "Jump to" link in the search result.
  2. Answer Yes to the question Did you have any rental or royalty income and expenses?
  3. Follow the on-screen instructions as you proceed through the royalties section