In TurboTax where do I list my 1099 Misc income from Royalties I inherited from my dad? What other forms are needed?

[cpgoz688]

There are 3 options in Turbo Tax for 2020 and I should not have to pay self emply

[PattiF]

Where you enter the 1099-MISC Royalty income depends on the source of the income.

If this is from Investment property such as natural resources that are extracted by a third party who leases your property or from intellectual property that you did not create, this would be reported on Schedule E. If you are not actively earning this income, it will go on Schedule E. 

To enter on the schedule E, go to personal income and select 1099-MISC,

• Enter Payer and Federal number then Royalties in Box 2 and  Continue
• Click box for Investment income from property that you own 
• Enter source of income next and follow the prompts

If this is from natural resources that you extract from property that you own, then this would be reported on a schedule C. If you inherited property from your dad that has natural resources that you are extracting, then it would be self employment income. 

[cpgoz688]

Thank you however I still need answers.  My dad was a musician and he received royalties.  He passed several years ago, I am the beneficiary of those royalties.  In Turbotax there is a few different ways to enter this.  All were reported to me on 1099-Misc (some as 'Royalty', some as 'Other').  Turbotax is trying to make me pay self employment tax on the income and complete schedule E or C (neither of which I can access).  Any help is most appreciated as relates to Turbotax specifically.

[ThomasM125 · Accepted solution]

You should enter the royalty income as a form 1099-MISC entry in TurboTax, as royalties. Royalties get reported on schedule E, which is the same schedule rental income gets reported on, so you may see some rental related questions that the IRS requires you to answer. Income reported on a schedule E is not subject to self-employment taxes, so you shouldn't have to deal with that.