@CarlaK9
Generally, with oil & gas royalty properties, you may have the following expenses:
- Property taxes on the mineral rights only
- Production taxes (usually on your 1099-MISC)
- Depletion (TurboTax calculates this for you)
Royalties are reported on Schedule E. To easily find this area of TurboTax, use the Search box at the top right corner of the TurboTax header and enter "royalties". Click on the "jump to royalties" link to be taken directly to this area of the program.
Follow the interview process to enter your Royalty Property, along with income reported on Form 1099-MISC and any property taxes you paid. Note that if your 1099-MISC includes "other deductions" (example: production taxes), enter these under "More Expenses" in the extended interview.
Unless you have a working interest in the mineral property, you cannot deduct other expenses like mortgage interest or property taxes on the land.
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