Does Turbotax Delux handle Depletion for Oil Royalties in 2024?

[co_guy]

I see some thoughts on work arounds for Oil Royalty depletion in the forum.  What Turbotax level is required to address Oil Royalty depletion?

Thank you!

[SabrinaD2]

Yes, TurboTax Deluxe can handle depletion for oil royalties. It calculates percentage depletion based on your income from the royalty property. The depletion rate for oil properties is typically 15% of the gross income

To enter this information in TurboTax Deluxe:

1. Open or continue your return. For the link in step 2 to work, you must be signed in to TurboTax.
2. Navigate to the 1099-MISC section:
   • TurboTax Online/Mobile: Go to 1099-MISC.
   • TurboTax Desktop: Search for 1099-MISC and select the Jump to link.
3. When you enter your 1099-MISC, enter the income in Box 2 - Royalties. On the following screen, choose the source of your royalty income:
   • Royalty investment income from a natural resource, intellectual property or other investment portfolio (no operating interest) – This includes natural resources extracted from your property by a third party who leases your property, as well as royalties from intellectual property that you didn't create yourself. This gets reported on Schedule E.
   • .TurboTax automatically calculates percentage depletion for a royalty property with income entered on Schedule E under Rental Properties and Royalties. See the original post here.

[co_guy]

Thanks.  That is what I had done, but it did not populate Schedule E.  I had to enter it manually.

[co_guy]

I should have noted that the issue is with the desktop version for Delux for windows.

[mesquitebean]

From my anecdotal experience over the years, the Deluxe interview has a box that does allow depletion entry in the Royalty Expenses interview, but does not automatically calculate and enter it.  So with Deluxe I always entered it manually.   In contrast, for the years I've used Premier or higher, Premier does calculate and enters the depletion in the box.   That minor convenience alone is not worth the upgrade.  Deluxe can handle it fine with a simple calculation.