Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
New Member
posted Jun 5, 2019 11:15:23 PM

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

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.

0 1 4925
1 Best answer
Employee Tax Expert
Jun 5, 2019 11:15:25 PM

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

1 Replies
Employee Tax Expert
Jun 5, 2019 11:15:25 PM

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