Some partners and I were Lessee's of some oil & gas leases that we held on to for over a year. We then sold all of the leases to a third party. No wells were drilled, so the only expenses we incurred were the cost of obtaining the leases (bonus payment to lessor). I would think this would be a long-term capital gain, but I am not sure how to report it in Turbotax.
You are correct that you would report this as sale of an asset, which could result in capital gains.
If you previously reported royalty income on Schedule E, you could indicate that you have sold the asset in Rental Properties & Royalties, under Wages & Income (screenshot).
Here's some info to help you:
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