Yes, if you have leased your mineral rights (rent not royalties), you would set up a Rental Property on Schedule E to report the rental income. While some of the questions may seem unrelated, answer as best you can.
The easiest way to find Schedule E in TurboTax Online is to Tax Tools in the left column >> Tools >> Topic Search. Type in "schedule e", click the topic in the list, then Go. In TurboTax Desktop, use the Topic List found in the header.
The type of rental is "Other" with a custom description ("Mineral Lease Rent"). If the lease didn't cover the entire year, enter the number of days between the lease signing and the end of the year (leave personal days blank). The rent you were paid was Fair Market rent.
In most cases, you are 100% owner (meaning you will enter 100% of the rent you were paid), and you are an active participant. Even if you live on the property covered by the lease, answer "no" that this was not your residence in the past (not converted from personal to rental).
Enter zero for the purchase price. The available date and the purchase date would be the date of the rental contract you signed. Leave any other boxes blank, except for the land value from your property tax statement (mineral leases belong to the land and have no improvements). The result should be zero depreciation on the property.
Generally, you will have only income as reported on Form 1099-MISC Box 1 (Rents). But if you have related expenses (like property taxes), enter them in the Rental Expense section under any category that seems appropriate. Skip Assets/Depreciation and Vehicle Expenses.
It's possible that you will not receive additional rent income for this property in the future. However, following these steps is the best way to report the income in TurboTax.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
