Solved: I entered sale of oil working interest property under sale of investment. Since I got a 1099-MISC, how do I explain to IRS if e-filed or must I mail with an explanation?
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I entered sale of oil working interest property under sale of investment. Since I got a 1099-MISC, how do I explain to IRS if e-filed or must I mail with an explanation?

I received a 1099-MISC from the oil company to which I sold two oil working interest properties and a disposal well. The form shows the amount paid under box 3 (Other Income). From other answers in turbo tax, it appears that I should actually show it under sale of investments so I can enter the correct information and show the cost basis. My question is can I still e-file or do I need to send my tax return by mail with an explanation about how I entered the amount on the 1099-MISC form?

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I entered sale of oil working interest property under sale of investment. Since I got a 1099-MISC, how do I explain to IRS if e-filed or must I mail with an explanation?

No, do not send your return by mail.  Go ahead and e-file your return with the sale entered correctly.  If the IRS writes to you about the 1099-MISC, respond to them promptly with the information showing that the income was included on your return.  The reason this is better is because when/if you get a CP2000, there will be a specific person assigned to receive your information, vs. a random data entry clerk at the IRS office.

Be certain you keep a copy of your filed return with all worksheets and schedules.

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Level 2

I entered sale of oil working interest property under sale of investment. Since I got a 1099-MISC, how do I explain to IRS if e-filed or must I mail with an explanation?

No, do not send your return by mail.  Go ahead and e-file your return with the sale entered correctly.  If the IRS writes to you about the 1099-MISC, respond to them promptly with the information showing that the income was included on your return.  The reason this is better is because when/if you get a CP2000, there will be a specific person assigned to receive your information, vs. a random data entry clerk at the IRS office.

Be certain you keep a copy of your filed return with all worksheets and schedules.

View solution in original post

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