How do you report on mineral rights income on property that you do not own?

[jbarwtx]

We have 1099-MISC for lease on mineral rights on property we sold years ago. The amount is under "rental" but whether I chose royalty or rental, it assumes we own the property. How do I accurately report this?

[KrisD15]

You can enter under 

• Rental Property and Royalties    START or UPDATE 
• Yes, Income from Rentals or Royalty Property you own
• Select YES to review if necessary otherwise "No" not real estate professional 
• Select "Royalty property or payment" 
• Type "Royalty rights, no land" as the description
• Use your address if needed 
• Does all the income belong to you? YES
• What type? Mineral Property
• Enter the income reported on the 1099-MISC 

(See the Note concerning additional boxes on your 1099-MISC)

If not needed, do not check the box and finish the interview

This will generate Schedule E and report the royalty income

The income will be on Schedule 1 line 5

If you enter as "Other Common Income" "Income on Form 1099-MISC and the income is in Box 1 RENTS, you will need to setup the rental for Schedule E. 

If you decide you want to enter the first way, you need to delete all entries for this 1099-MISC you may have already entered and start at the beginning