1099-MISC - Royalties

[efong_TT]

I own shares in BP Prudhoe Bay Royalty Trust stock.  I received royalty cash payouts and received a 1099-MISC; nothing else.

I have not sold the stock, so no capital gain/loss

Do I need to follow the instructions in the BP Prudhoe Bay 2021 Tax Booklet for income tax reporting or just report the royalty pay out using the 1099-MISC or both?

https://s24.q4cdn.com/[removed]/files/doc_downloads/tax_info/2022/BP-2021-Booklet.pdf

[PattiF]

If box 2 is the only amount on the 1099-MISC, enter the royalties only so that they are transferred to Schedule E.

Here are instructions from @LenaH:

You enter your 1099-MISC from oil and gas lease income in Box 2. On the next screen, choose Investment income from property you own as the source of your 1099-MISC. Although you do not own the property, this income still has to be reported on a Schedule E. Choosing the latter (royalty income from a business you own), would flow to a Schedule C on your return. 

TurboTax will then create a Schedule E on your tax return. Once you enter the address of where you own the mineral rights, you will select Oil and Gas Income and be able to enter any expenses relevant to this income. 

Please follow the steps below to correctly report your royalty income:

1. Open your return.
2. Search 1099-MISC and select the Jump-to link.
3. Enter your royalties in Box 2.
4. Select Investment income from Property you own for the page titled Source of 1099-MISC Income.
5. Search for Schedule E and select the Jump-to link. 
6. Click Edit next to the Royalty entry.
7. Answer the remaining on-screen questions.

[efong_TT]

@PattiF and @LenaH

I was leaning towards entering the information from the 1099-MISC and your reply helped confirm it.

Not sure why there is a reference to the BP Prudhoe Bay Royalty Trust website regarding the tax booklets.

Thank you for the detailed explanation.

Take care,