topic 1099-Misc Assuming Business Ownership in Get your taxes done using TurboTax

1099-Misc Assuming Business Ownership

jrtree99 — Sun, 07 Mar 2021 19:26:11 GMT

I received oil and gas royalties on four 1099-Misc forms from 4 different companies, but do not own the businesses or the properties where the oil and gas is extracted. TurboTax Premier wants to create a Schedule C assuming I own a business. Schedule C includes things like business name, address, accounting methods, and other things which do not apply in this situation. (The income involved is all of $180 total!)

How do I enter the 1099-Misc data in such a way as to NOT have the software force a Schedule C, since that doesn't apply to me?

Re: 1099-Misc Assuming Business Ownership

JeffreyR77 — Sun, 07 Mar 2021 20:23:10 GMT

Your royalty income reported on Form 1099-MISC should be reported on your tax return on Schedule E Rentals and Royalty Income, not Schedule C. In TurboTax, you can navigate to Wages and Income, 1099-MISC:

You then need to identify the source of the royalty income as Investment Income from property you own.

The property in this case is the mineral rights.

This will take the tax reporting out of the realm of Schedule C and place it on Schedule E.

Name the royalty as it is reported to you.

You will be able to add your additional royalty sources so you can track them individually.

Re: 1099-Misc Assuming Business Ownership

jrtree99 — Sun, 07 Mar 2021 21:45:58 GMT

I appreciate this guidance, however, there's no land/property ownership involved either. Selecting the "Investment Income" option generates a Schedule E, which gets into the details of the property such as address. That isn't applicable either.

Re: 1099-Misc Assuming Business Ownership

ToddL99 — Sun, 07 Mar 2021 23:23:26 GMT

@JeffreyR77 's response gave the correct way to report your old and gas royalty income.

Royalty payments (book, movie or oil & gas) must be reported on Schedule E.

You do have to provide an address, but it can be the address of the exploration/production company that sent you the payments. If you happen to have the actual address of the lease, that is fine, but it is not necessary.

And while you may not "own" the property, you do own an interest in the property's underlying natural resources (i.e. oil & gas).