How do I file a 1099 Misc form for income rents (box1) for gas rights? Contract to rent gas rights.Any suggestions on how to handle this? thanks

[-zatora214]

Received a rental "signing bonus" for our gas rights. When I go to fill in Schedule E worksheet, it asks for expenses, etc. This was just a one time 1099 Misc. form. Not sure how to handle it.

[Carl]

All rental and royalty income is reported on SCH E as a part of your personal tax return.
If the income is reported in box 1 of the 1099-MISC then you have rental income.
If the income is reported in box 2, you have royalty income.
This MATTERS for correct reporting.

[-zatora214]

I did report it as box 1 rental income. Then you are  asked how many days I rented the property out, expenses, etc. I did not incur any expenses. Since this is just for gas royalties AT A FUTURE DATE, what do I do about expenses and income? thanks

[Carl]

Royalty income and rental income is two completely separate things and while both are reported on SCH E, they are treated entirely different. Do you actually own the land this oil rig sits on? Or maybe you own the oil rig itself and lease it out?

[MichaelDC · Accepted solution]

It's appropriate to add expenses if you have them. Please feel free to post any additional details or questions in the comment section. 

https://ttlc.intuit.com/replies/5388422

You want to enter a 1099-MISC that was received for oil in a different place than other 1099-MISC's. Feel free to use the steps below to get to the correct area.

To Enter Your Oil & Gas Lease Income:

1. Select "Federal" at the top of the page

2. Select the "Wages & Income" sub-tab

3. Scroll down to "Rental Properties and Royalties" and select "Show More"

4. Select "Start" next to "Rental Properties and Royalties (Sch E)"

5. Answer "Yes" when you arrive to the screen asking "Did you have any rental or royalty income and expenses in 2017 for property you own?"

6. Continue answering the questions until you arrive to a screen titled "Is This a Rental Property or Royalty?". At this point select "Royalty Property or Payment" and continue through the section