topic 1099-MISC in Business & farm

1099-MISC

bkayuha — Thu, 16 Apr 2020 12:24:43 GMT

I received two 1099-MISC forms from two different companies for gas & oil rights. However, they had the amounts in different blocks. One was in "1. Rents" and the other was in "3. Other Income". These were both for exactly the same type of Misc Income. Do I just report them as sent, put both of them on one category and does it make any difference?

Re: 1099-MISC

Irene2805 — Thu, 16 Apr 2020 14:47:33 GMT

Report the information on the 1099-MISC forms as they were sent to you, That way the IRS can match them up with the copies they receive,

Re: 1099-MISC

Carl — Thu, 16 Apr 2020 15:17:56 GMT

I received two 1099-MISC forms from two different companies for gas & oil rights. However, they had the amounts in different blocks. One was in "1. Rents" and the other was in "3. Other Income".

I suspect the "other" 1099-MISC should have the amount reported in box 2, and not box 3. You need to contact the issuer and ask them what that amount in box 3 was paid to you for EXACTLY.

The box 1 amount is rental income that gets reported on SCH E. It's what they paid you to rent the land from you for extracting the gas/oil.

I would expect the other amount that "should" be in box 2, to be royalty income which would be reported to you in box 2. If it's reported in box 3, then it's self-employment income that gets reported on SCH C. For self-employment income that would mean that you provided the payer a product or service "on a recurring basis" for that money.