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Returning Member
posted Jun 6, 2019 9:09:18 AM

I received a 1099 misc for a signing bonus for a mineral lease. how is it reported

I leased mineral rights and received a 'bonus' payment when signing the lease.  I also received royalties on the production.  I received 2 1099 misc, one for the bonus, with the bonus amount shown in block 1 Rents..  For the royalties, the 1099 has the royalty amount properly in block 2.  I am having a difficult time figuring out how to enter the 'rents' 1099 into TurboTax. 

0 5 4914
5 Replies
Expert Alumni
Jun 6, 2019 9:09:19 AM

Lease bonus payments are considered rental income. See IRS Tips on Reporting Natural Resource Income .

  • Enter your 1099-MISC for rents in the 1099-MISC section as it appears. 
  • Check that it is for Rental income from the rental of real estate (Schedule E)
  • Add Lease Bonus on the screen to select the rental or royalty that generated this income, and check that.
  • Continue through the rest of the section.

Level 1
Jan 30, 2020 1:27:58 PM

Is this considered "for profit" property?

It asks questions relative to the number of days property is rented.  Since this for a mineral lease, how should I respond to this question?

Thanks for your help.

Expert Alumni
Jan 30, 2020 1:38:28 PM

The mineral lease is a for profit rental and the number of days rented should be 365 (if you have received the lease payment for the full year).

Level 1
Jan 30, 2020 2:01:38 PM

It was a one-time signing bonus covering a multiple year lease that was received in November of 2019.  There is no other payment being made.

Expert Alumni
Jan 30, 2020 2:08:15 PM

@RLM1 

 

Then for days rented, count the days from receipt of the payment until the end of the year.