Entering expenses for rental/royalty property

[JWBB]

I own a rental property (house & land) that I also receive royalty income from a gas lease on.  When I enter my rental expenses in TT under the rental property I end up owing more taxes than if I enter them under the royalty income.  Can I enter them under either since they are really the same property?  Why would it make such a difference under what section I entered them? 

[ColeenD3]

No. It may be the same form, but it is not the same type of property.

Your mortgage, repairs, depreciation all apply to a house.

In the case of a gas lease, you can deduct expenses you incur to create the gas lease, such as cost depletion, geological surveys or legal fees associated with the creation of the gas lease.

[t_thexton]

How do I enter rental income/expenses and royalty income for the same property?

[AmyC]

You enter the rental income portion under rental income and the royalty under royalty. This is what you will do:

1. Locate Rental Properties and Royalties
2. Select start/Edit
3. Income from Rentals or Royalty Property
4. Select YES
5. Real Estate Professional, select an answer and continue
6. Is This a Rental Property or a Royalty?
7. Select Royalty
8. Enter all the information and continue
9. Does all the Income Belong to You? select yes or no and Continue
10. What type of Royalty income? select an answer and continue
11. Enter information and continue
12. Enter Depletion information and Finished
13. Screen will show Rental and Royalty Summary
14. Select blue button to ADD Another Rental or Royalty
15. Select rental property
16. continue through entering the rental property income and expenses

@t_thexton

[Carl]

No. You don't get to pick and chose here. ROyalty income is reported as royalty income, and rental income is reported as rental income.

Rental property is subject to depreciation and must be depreciated by federal law.

Royalty income is subject to depletion and must be depleted by federal law.

Depreciation and depletion are two completely different things that in and of themselves have no relation to either other, even though both types of income are passive income.