How do you claim oil well money on your taxes?

[DoninGA]

Is this Royalty income?  Did you receive a Form 1099-MISC for the income?

[Carl]

Do you own the well? Or is this some other arraignment? I would expect you to receive a 1099-MISC with the income paid to you reported in box 2 of that form. But without confirmation we may be providing you with incorrect information. How you report your income, depends on the tax reporting document received by you for that income, from the entity that pays you that income.

[Anonymous · Accepted solution]

If you are an independent contractor or self-employed in a business related to a working interest in the oil or gas, you must report the royalty income on Schedule C instead of Schedule E and generally will be subject to self-employment tax. If your royalty is a working interest, the income should be listed in Box 7 of the 1099-MISC form.

Unless you are the owner of a large oil and gas corporation, your oil and gas income is generally from a royalty, which is a percentage of the total income that you receive when resources are extracted from your property or from a mineral right in which you own an interest. - report on schedule E - not subject to self-employment taxes. you may or may not get a 1099.  for example, you can buy an interest in a royalty trust that's traded on a stock exchange.   they may not issue a 1099 bu instead a report enabling you to compute income expenses including depletion.  

[Carl]

..and thusly the above quantifies my request for more information. 🙂