1099 MISC for Royalty payments

[MarshaM]

I received a 1099 MISC for Royalty payments on oil leases. In addition to the royalties in Box 2, there is  a column for Deductions From Revenue which includes amounts for Production Taxes and Other Revenue Deductions. Can I deduct that amount from the royalties paid, and where do I do that?

[Irene2805 · Accepted solution]

Yes - You can enter the Production Taxes and Other Revenue Deductions as an expense against the royalties.  To do this please follow these steps:

1. Click on Federal  > Wages & Income  [In TT Self-Employed:  Personal > Personal Income].
2. Scroll down to the Rental Properties and Royalties section and click on the Start/Revisit box.  
3. On the Income from Rentals or Royalty Property You Own screen click Yes.
4. If you have already started adding information about your royalty, you will come to the Rental and Royalty Summary screen.  Click the Edit box next to the royalty.  Or you can click on the link Add Another Rental or Royalty.   
5. On the screen, Is This a Rental Property or Royalty?  be sure to mark the radio button next to Royalty property or payment. 
6. Continue through the screens, entering the requested information, until you reach Review Your [XX] Royalty Summary.  
7. On this screen, click the Start/Update box next to Expenses.  Continue to the Any Miscellaneous Expenses screen and enter the amount.