1099-NEC entry for lease payments

Forum|Forum|1 month ago
April 12, 2026
1 reply
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I received a 1099-NEC for a lease payment on a piece of property that I have an undivided interest in. This was a purely passive activity for me and normally I would expect this sort of thing to map into schedule E. However, I am having a hard time figuring how to do this in the Turbo Tax desktop interface. 1099-NEC entry classification does not give a suitable/accurate choice (self employment, farm income, hobby, lawsuit, Medicaid waiver, Income that should have been on W2. All don't apply). This is not self-employment nor a hobby. This is lease income on raw land to a company looking to potentially develop it for minerals. We do not actively participate in a business to do this and provide no services to the lessee except legal access to the property. Maybe the issuer of the 1099 made a mistake, but how do I enter it correctly in the TurboTax interface?

TurboTax Business Windows

MaryK4

Level 15

Form 1099-NEC is for non-employee compensation (services). Passive lease bonuses and rents should be on Form 1099-MISC, Box 1. You can report as Rental/Royalty income. This method places the income directly onto Schedule E as passive income.

In TurboTax:

Go to the Federal Taxes tab and select Wages & Income.
Find the section for Rentals and Royalties (under Rental Properties and Royalties (Sch E)) and click Start/Update.
Add a new property and describe it as Land or Royalty (specifically "Oil & Gas" if for minerals).
When prompted for income, do not select that you received a 1099-NEC. Instead, enter the amount as Rent Received or Cash/Other Income.

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