I live in California and received a 1099-MISC for an easement on land in Texas where I receive royalties, listed with "Box 1-Rents". Read somewhere that it should be a 1099-S. Similar posts suggested entering the payment as a negative number in the "Other reportable income" in the Federal section. I initially didn't do that and the Federal return seemed to automatically consider it as a loss. Am I wrong? Should I go back and report as a negative number? When I got to the California State return, it considered it as income. Under the "Here's the income that California handles differently", I went to Miscellaneous > Other Adjustments to Income, typed in 'Easement' and entered the amount received in the Subtraction column. I assume it needs to be entered as a positive number (without the negative symbol) and program with subtract amount. So is that correct for the state? Or, if I enter as a negative number as described above in the Federal section, will that make the adjustment in the State return so that I don't need to enter it in the "Other Adjustment" section? Just don't want an issue if it doubles the deduction, but want to make sure I get the proper deduction. Thank you!
