1099-Misc

[Rocky1023]

I received a 1099-Misc containing royalty and rent payments.  When entering the information I keep receiving an error stating that I cannot put rents and royalties on the same Schedule E.  The amount of the rents is less than $300.00; can I put that under other income?  Also, where do I put production taxes.  The 1099-Misc is for oil royalties.

[MarilynG1]

You make two 1099-Misc entries into TurboTax.  One with the 'Rents' amount and the other with the 'Royalties' amount.

Production Taxes and Depletion are  'More Expenses' in the interview on the Schedule E reporting the Royalty income.

Here's more info on Reporting Royalty Income and Expenses. 

[Rocky1023]

I made two 1099-Misc entries and I keep getting error messages.  I spent about 20 minutes on the phone yesterday about this issue with someone from Turbo Tax, and he couldn't figure out why the errors kept coming up.  That's why I want to know if I can just report the rent under other income.

[PatriciaV]

Please clarify what error messages you are seeing for these rent/royalty entries? It seems you have made the correct entries to split the 1099-MISC into two Schedule E properties.

[Rocky1023]

The error states that I cannot combine rents and royalties which I am not doing.  I made separate entries for the rents and royalties.

[Rocky1023]

The error states that I cannot combine rents and royalties which I did not do; I made separate entries for rents and royalties.  When I spoke with someone from Turbo Tax Friday I gave him access to my computer, and he could not figure out what the problem was.  Could there be a glitch in the software?  Also, I would still like to know if I can enter rents under other income.

[PatriciaV]

Please clarify if you have two properties under Rental Properties and Royalties. You cannot report rent and royalties for the same property. If you have done this, be sure that one is marked "Rental" and the other "Royalty" on the property profile page. Add "Royalty" after the name of the royalty property to avoid confusion.

[Rocky1023]

I did that and it still comes up as errors.  I have two 1099-Misc forms; one has royalties only and the other has rents and royalties.  When I entered the information for the one with both, I completed two forms - one for rents and the other for royalties.  I named one rents and the other royalties, and it still shows as errors.  If I can enter the rents under other income, will that solve the problem?

[PatriciaV]

If you have no deductions to report for the income, you have the option to report this as Other Taxable income. However, the IRS may question this choice.

It would be helpful to have a TurboTax ".tax2023" file that is experiencing this issue.

You can send us a “diagnostic” file that has your “numbers” but not your personal information.  If you would like to do this, please follow these instructions: 

In TurboTax Online, open your return, go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools. 
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent. 
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number. 
5. Reply to this thread with your Token number and tag (@) the Expert requesting the token from you. Please include any States that are part of your return.

We will then be able to see the same experience you are having. If we are able to determine the cause, we'll reply here and provide you with a resolution. 

If you are using TurboTax for Desktop, go to Online in the top menu, then choose "Send Tax File to Agent." On a Mac computer, choose File >> Share or Help >> Send to Agent.

[Rocky1023]

OK.  I'll do it now.

[Rocky1023]

Token No. 1212346

[PatriciaV · Accepted solution]

Here's the problem: both Schedule E's are marked as Royalty. One needs to be a Rental. Also, there's a hidden schedule E that cannot be edited.

Your best option is to delete all Forms 1099-MISC related to Schedule E, then report the income in the Schedule E interview. Delete them from the 1099-MISC topic under Income.

After you delete the 1099's, go to Rental Properties and Royalties. Delete the Royalty Property and confirm the hidden Schedule E is on the forms list.

Review the Property Profile for the Rental property to be sure the Rental box is checked. Also report that it was rented all year at a fair rental price. Then work through the rental interview to report the rental income from Form 1099-MISC. Add another 1099-MISC if you have more than one with rental income.

Continue back to the Rental and Royalty Summary page and Add Another Rental or Royalty - in this case, the royalty property you deleted earlier. Be sure to check the Royalty property box. Also check the box for Oil and Gas Royalty Income.

The income page provides a box to enter the total royalty income you received from all sources (including 1099-MISC). Agree to the depletion calculation and continue back to the summary page.

These steps should resolve the rent/royalty issue on your return.

@Rocky1023