Yes, you can report expenses deducted from your gas royalties 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.
If TurboTax prompts you to enter an address for the property, use the actual address if you know it (look on the property tax bill if you have one). Or use your own address. The IRS instructions say address lines 1 and 2 should be left blank, but sometimes the program won't let you continue without an address.
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