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ckuykendall
New Member

I have "rent" income on form 1099-MISC from an oil and gas lease of which I only own the mineral rights. Do I claim this as rental or royalty property on Sch E?

 
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PatriciaV
Employee Tax Expert

I have "rent" income on form 1099-MISC from an oil and gas lease of which I only own the mineral rights. Do I claim this as rental or royalty property on Sch E?

Yes, income from oil/gas leases is reported on Schedule E (Rental Properties & Royalties), even if you do not own the property.

To easily find this area of TurboTax, use the Search box at the top right corner of the TurboTax header and enter "schedule e". Click on the "jump to schedule e" link to be taken directly to this area of the program.

Follow the interview process to enter your Rental Property, along with income reported on Form 1099-MISC and any property taxes you paid. "Other deductions" reported on Form 1099-MISC (example: production taxes), are entered under "More Expenses" in the extended interview.

If TurboTax prompts you to enter an address for the property, use the actual address if you know it (look on the property tax bill if you have one). Or use your own address.

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5 Replies
PatriciaV
Employee Tax Expert

I have "rent" income on form 1099-MISC from an oil and gas lease of which I only own the mineral rights. Do I claim this as rental or royalty property on Sch E?

Yes, income from oil/gas leases is reported on Schedule E (Rental Properties & Royalties), even if you do not own the property.

To easily find this area of TurboTax, use the Search box at the top right corner of the TurboTax header and enter "schedule e". Click on the "jump to schedule e" link to be taken directly to this area of the program.

Follow the interview process to enter your Rental Property, along with income reported on Form 1099-MISC and any property taxes you paid. "Other deductions" reported on Form 1099-MISC (example: production taxes), are entered under "More Expenses" in the extended interview.

If TurboTax prompts you to enter an address for the property, use the actual address if you know it (look on the property tax bill if you have one). Or use your own address.
lindy103
New Member

I have "rent" income on form 1099-MISC from an oil and gas lease of which I only own the mineral rights. Do I claim this as rental or royalty property on Sch E?

On Schedule E do you mark Rent or Royalty?  1099 Misc shows Rent.  Schedule E goes through many property questions if you mark rent, but program shows error if you mark royalty.
jdp2322
New Member

I have "rent" income on form 1099-MISC from an oil and gas lease of which I only own the mineral rights. Do I claim this as rental or royalty property on Sch E?

Do you not enter it as a regular 1099-MISC, then?  Because when I did that I believe the income is added in twice.  And the 1099-MISC entry also starts a schedule C for me, which I do not need.  Will Turbo Tax fix this?
Connie775
New Member

I have "rent" income on form 1099-MISC from an oil and gas lease of which I only own the mineral rights. Do I claim this as rental or royalty property on Sch E?

I have this same question.   Received 1099 with royalty marked and also 2 others with rent marked.  If I stay with rent it takes me to a schedule C   Not sure what to do.

KathrynG3
Expert Alumni

I have "rent" income on form 1099-MISC from an oil and gas lease of which I only own the mineral rights. Do I claim this as rental or royalty property on Sch E?

Form 1099-MISC would be directed to a Schedule C if the question is answered that the rent was of personal property or equipment or that the royalty income is from your business, including artist royalties or operating a natural resources business. In such cases, the income would be subject to self-employment tax.

 

Rental and royalty income are typically reported on Schedule E and is generally not subject to self-employment tax. 

 

The QBI deduction may be available for both schedules. 

 

For more information, see:

Where do I enter income and expenses from a rental property?

What is the Qualified Business Income (QBI) deduction?

Can I get the QBI deduction on rental income?

How do I enter a 1099-MISC for royalty income?

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