My wife has oil and gas royalties from an LLC . 1065's have been filed. she also gets royalties out side the LLC. How are these items handled?

[pk]

you are talking about two different levels here -- at the entity level ( 1065 ) generates a form K-1 detailing the income/ expenses etc. attributable to each individual partner/ owner.  You report this K-1   on your individual return --  the details will flow  through Schedule-E only your form 1040.

The individual level distribution of royalty income  is entered under "royalty income" etc. from the dropdown list  under personal income tab.  This data also will flow to form 1040  and again through the Schedule-E ( page 2 ).  It is just that this income is entered directly  rather than the K-1 reporting.

Hope this helps.