Where do I report a 1099-misc for a good neighbor agreement I have for wind turbines, I get rental income but it just allows them to be on the property next to me?

[KathrynG3]

Form 1099-MISC for wind turbines as a good neighbor agreement should be reported as a royalty. This is reported on Schedule E. To do this in TurboTax, follow these steps:

• From the left menu, select Federal, which will open on the Income & Expenses tab.
• Scroll down to Rental Properties and Royalties (Sch E) and select Edit/Add.
• At Your 2020 rentals and royalties summary, select Edit by your related royalty property, or add a new instance.
  • When prompted: What are you here to report?, select the Royalty tile and Continue.
  • You may wish to describe the royalty as Good neighbor agreement.
  • Select Geothermal Property tile and answer the questions that follow until reaching Looks good.
• At Let's enter the income, select Form 1099-MISC (normally from property managers) and Continue.
• Enter your details.

For more information about the Residential Energy Credit for energy efficient property installed in 2020, see IRS 2020 Form 5695 Instructions regarding the Residential Energy Efficient Property Credit and states: 

Qualified small wind energy property costs are costs for property that uses a wind turbine to generate electricity for use in connection with your home located in the United States. The home doesn't have to be your main home.

[mamau]

Where do I report in home and business?

[Carl]

The answer is correct if this payment will be made to you on a recurring basis. Depletion figures in every year then. However, if it's a one time only payment, it gets handled differently.

[mamau]

I'M SORRY IM USING TURBO HOME AND BUSINESS AND THE INSTRUCTIONS DON'T SEEM TO WORKING.  AM I MISSING SOMETHING HERE. I HAVE NEVER HAD TO REPORT THIS BEFORE AND WANT TO REPORT CORRECTLY

THANK YOU

[cool_finn]

Hi Kathryn, I'm doing this same thing for our 2021 taxes -- we receive a "nuisance fee" from a Texas-based windfarm because they have a wind turbine within 600 feet of our property line in Illinois. We do not own the windfarm company or any subsidiary of it; we just receive a check once a year and a 1099-MISC for royalties. When I select the Royalty tile, then Geothermal tile, I get a questions asking if made any of the following payments (payments >$600 to a contractor or payments that required me to send someone a 1099-MISC), and it asked if we own or partially own the business (we do not). We struggle with this every year. What is your recommendation? Thanks in advance! 

[PattiF]

You would enter this as other income in a way that will not be taxed as a business.

To do that in TurboTax Online:

• Go to Other Common Income in the Income & Expenses section,
• Click Start at the 1099-MISC box
• Enter info from 1099-MISC,
• Describe the reason for this 1099-MISC, and Continue
• Does one of these uncommon situations apply?, Choose None of these apply and Continue
• Check that No, it didn't involve work like my main job
• How often did you get income for windfarm nuisance fee, Choose I got it in 2021 and Continue
• Did the windfarm nuisance fee pay involve an intent to earn money, Choose, No, it didn't …. And Continue

[drmdvm46]

What if the payer listed the payment as rent rather than royalty?

[RobertB4444]

Listing it as rent rather than royalty doesn't change the answer - if it is a recurring payment then it is reported on a schedule E as rent or royalty income.  If it is a one time (or short term) payment then it should be entered on schedule 1 under 'Other Income.'  

@drmdvm46