no one is addressing the ROOT cause of this problem of 1099 Misc Box 2 Royalty caught in loop

[ilangford]

There is clearly a software glitch that needs fixing.  I have been using TT since they were formed and put in royaltys nearly every year without this problem.  There is no Sch E being created... it is programming because there is no way to get out of the loop!!!!!!!!!!!!!!!!!!!!!!

[mesquitebean]

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@ ilangford wrote:
no one is addressing the ROOT cause of this problem of 1099 Misc Box 2 Royalty caught in loop

There is clearly a software glitch that needs fixing.  I have been using TT since they were formed and put in royaltys nearly every year without this problem.  There is no Sch E being created... it is programming because there is no way to get out of the loop!!!!!!!!!!!!!!!!!!!!!!

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You didn't say what kind of royalty, so I'll assume mineral royalty since you mention Schedule E.  If it's some other type of royalties, then you need to explain more.

What product are you using--online or desktop, and what version--Deluxe, Premier, Home and Business?   I personally have had no problem with the royalty section in the desktop version.  But it might depend on "where" you are entering the 1099-MISC.   There are 2 possible routes.  Are you entering it in the section called Form 1099-MISC and Other Common Income>Income from Form 1099-MISC, or are you entering it directly when you go through the Rental/Royalties interview?    You can do it in either place, but if you choose the former, your work is still not done.   If you entered the 1099-MISC info in the Other Common Income section, that's only the first step in the creation of the Schedule E.   After you enter the 1099-MISC and continue, a screen will ask if it's investment income (which ultimately flows to Schedule E), or whether it's from a mineral business (or other type of business royalty) that reports on Schedule C.    Even after you choose investment income there (if that's your situation), you still have to go through the Rental/Royalties income topic interview to prepare the Schedule E.

[ilangford]

I am using 2023 turbotax home and business desktop version.  I follow the path of letting turbo tax questions guide me through everything.  As I stated above, when it ask if I had any 1099-Misc, I said yes.  I did enter all the information from my 1099 misc and put the amount in box 2, royalty as this is oil/gas royalty income from mineral rights I own.  The software does not take you to Sch E as it should so you can complete that form as well.

[mesquitebean · Accepted solution]

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@ ilangford wrote:

I am using 2023 turbotax home and business desktop version.  I follow the path of letting turbo tax questions guide me through everything.  As I stated above, when it ask if I had any 1099-Misc, I said yes.  I did enter all the information from my 1099 misc and put the amount in box 2, royalty as this is oil/gas royalty income from mineral rights I own.  The software does not take you to Sch E as it should so you can complete that form as well.

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As I mentioned above there are 2 ways to get to the Rentals and Royalties section to prepare the Schedule E.  In the interest of time, I'll tell you below how you can skip directly to the Schedule E interview.    But here's what you likely experienced.   If you are currently going through the whole interview in order, I suspect you were entering the 1099-MISC in a section called "1099-MISC and Other Common Income."   Once you finish entering the 1099-MISC, it asks if it is investment income (Schedule E) or business income (Schedule C), but it does not automatically continue on to the Schedule E interview.   If continuing in order, it will go to other topics first then later arrives at the "Rentals and Royalties Income" section to complete the Schedule E.    But I will tell you now how to skip directly to the Schedule E interview so you can finish up your royalties income and expenses.

• Open your TurboTax Home and Business program, and choose the "Business" tab at the top.
• Then subtopic "Business Income and Expenses."
• Select "I'll choose what I work on."
• On the next screen choose topic "Rental properties and Royalties" and Start (or continue).
• The next screen may ask if you had rental or royalty property.  Say "yes" to continue on.
• Then a screen will ask you a couple of questions to see if you are a real estate professional. 
• After that a screen will ask you if your property is a rental property or a royalty property.   If royalty, so indicate, and then when it asks, provide a description/address in the blanks.
• Then continue answering the rest of the screens.  Once you finish the Royalty Income part, you'll be able to go to the Royalty Expenses section to enter any expenses, such as depletion, production costs, production taxes, etc.

NOTE:  Since you already entered the 1099-MISC income once, pay careful attention that you don't enter the royalty income twice, or you'll be paying taxes on it twice.   At the end of that section it should tell you what your total royalty income is.  So verify that figure with your own.

[mesquitebean]

@ ilangford  I added some info to my comment that I just left above.  I must have hit "submit" before I was ready with all the steps.  🙁   If you received an email with the incomplete information, please return to the forum to see the rest of the info for skipping directly to the Rentals and Royalties section to prepare your Schedule E.

[IsabellaG]

We would like to take a deeper look at this. However, we need a diagnostic file which is a copy of your tax return that has all of your personal information removed. You can send one to us by following these directions:

1. Open your return.
2. Click the Online tab in the black bar across the top of TurboTax and select “Send Tax File to Agent”
3. This will generate a message that a diagnostic copy will be created.  Click on OK and the tax file will be sanitized and transmitted to us.
4. Please provide the Token Number that was generated in the response. 
   
   In the meantime, please follow the instructions that @mesquitebean provided in preparing/filing your return.
   
   @ilangford