This income would be reported on a Schedule E as Royalty income.
- Go to the Your income and expenses section
- Click the Start button next to Rental Properties and Royalties (Sch E) under Rentals, Royalties and Farm
- Did you have any income from rentals or royalties? Click Yes
- Indicate that you are not a real estate professional by checking the bottom box.
- What are you here to report? Choose Royalty and continue
- Enter the information about the oil company that sent the check and Continue
- Indicate who owns this income
- What type of royalty income is this? Choose Oil and gas income and Continue
- Follow the prompts to the Let's enter the income for royalty, indicate Cash, checks ... and Continue
- Enter amount and continue with the rest of tax return
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