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We received a check to renew our lease for our gas and oil mineral rights. Does this go under royalty payments?

 
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PatriciaV
Expert Alumni

We received a check to renew our lease for our gas and oil mineral rights. Does this go under royalty payments?

No, not if this income was reported on Form 1099-MISC as "Rents" in Box 1. This amount is reported on Schedule E as Rental Income, not Royalties. 

If you also have Royalty Income for the same property, you can't report both rental income and royalty income under the same property on Schedule E.

To resolve this, enter two separate properties (activities).

After you've completed the information for the rental activity (mark as "Rental"), add the royalty property. You can keep the same address, but enter a different property description and be sure to mark this as "Royalty". See screenshot below (click to enlarge).

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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1 Reply
PatriciaV
Expert Alumni

We received a check to renew our lease for our gas and oil mineral rights. Does this go under royalty payments?

No, not if this income was reported on Form 1099-MISC as "Rents" in Box 1. This amount is reported on Schedule E as Rental Income, not Royalties. 

If you also have Royalty Income for the same property, you can't report both rental income and royalty income under the same property on Schedule E.

To resolve this, enter two separate properties (activities).

After you've completed the information for the rental activity (mark as "Rental"), add the royalty property. You can keep the same address, but enter a different property description and be sure to mark this as "Royalty". See screenshot below (click to enlarge).

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
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