Do I need to send 1099 forms to people I purchase mineral rights from?

toddmcfadden · ‎June 5, 2019

I am a sole proprietor and purchase oil & gas rights from individual homeowners. Am I required to send any tax forms to the sellers, or the IRS? It appears that a 1099-MISC form would be inappropriate because the proceeds should be classified as long term capital gains, and not income.

PaulaM · ‎June 5, 2019

No, you do not owe the sellers a 1099-MISC for the sale of mineral rights. The sellers will report the sale on Form 4797 and Schedule D.

https://www.irs.gov/uac/about-form-1099misc

https://www.irs.gov/pub/irs-pdf/i4797.pdf

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PaulaM · ‎June 5, 2019

No, you do not owe the sellers a 1099-MISC for the sale of mineral rights. The sellers will report the sale on Form 4797 and Schedule D.

https://www.irs.gov/uac/about-form-1099misc

https://www.irs.gov/pub/irs-pdf/i4797.pdf

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

Do I need to send 1099 forms to people I purchase mineral rights from?