Property Taxes & Mortgage Interest on Royalty & Primary Home Property

[19jam61]

Several years ago I began receiving gas royalties for my primary home property (couple hundred a year at best). For the first year, because it was my primary home with property taxes and mortgage interest, I tried to deduct those expenses under Common Expenses for Rental and Royalty Summary IN ADDITION TO under Your Home for Deduction and Credits. Turobox flagged it stating that I could not use that deduction twice. Now, for 2022 taxes, I entered those deductions again in both places but it passed Turbo Tax's review scans. Were there tax law changes regarding mortgage/property deductions for this type of scenario? Are these legal deductions?  

[KrisD15 · Accepted solution]

No, the law hasn't changed. Mortgage Interest and Property taxes are NOT legal deductions for gas royalties. 

You cannot claim Home Mortgage Interest or Property Taxes on Royalties. 

(Additionally you cannot "double dip" the same amount as both expenses and as deductions.)

The program may assume that you are entering legitimate expenses for the Royalty Income. 

There is the availability of having the program make an allocation, but that would only be for a rental since it would be based on square foot and time used as a rental. This is not possible for royalties. 

Make sure you have indicated "Royalty" on your Schedule E in TurboTax and not "Rental". 

[19jam61]

Thank you KrisD15!  Thanks for your very speedy response! That's how I've been filling this portion of my taxes, keeping the property/mortgage tax out of the royalty calculation and only in property deductions. Thanks for your confirmation on that. And even though TurboTax is great at preparing taxes, you still need to know the do' & don'ts...  Thanks again!