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The 1099 for the lease, or box 1 rent, is from the company that signed the lease with us. The other 1099 for the box 2 royalties is from the company doing the drilling. When I tried entering the 1099 for the rent, under the misc income section it was treating as a rental property.
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When you enter income from a K-1, rental property, or non-business royalty, TurboTax will automatically generate Schedule E.
Schedule E, Supplemental Income and Loss is used to report profits and losses from K-1s as well as income and expenses from rental property and certain types of royalty income.
You generally report your oil and gas royalties on Part I of Schedule E, Form 1040.
The IRS expects the royalty payment to be reported on the correct form.
Specifics for reporting
Box 2 of Form 1099-MISC is reserved for tax reporting related to royalty payments.Part I of Schedule E (Form 1040)[select royalty for this]
Box 1 of Form 1099-MISC is reserved for tax reporting related to rental payments.Part I of Schedule E (Form 1040)[select rental for this]
Use a separate schedule for each type payment .
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