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.
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.
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