Need help with 1099-MISC regarding Royalties

[dm8711]

I inherited a "very" small share in some gas wells this year. I was sent a 1099-MISC for the earnings.  Box number 2 is filled out with the total amount of royalties of $1200.   (No other box has any information filled out).  The total of my checks were $1077. At the bottom of the 1099-MISC form the drilling company has printed the following:  OWNER DEDUCTIONS $132 and INTEREST $9.   I assume I use Schedule E  but there is nowhere to report the interest?  And do I report the Owner Deduction on line 19. OTHER? 

Or am I completely wrong on how to do it? 🤔

Any help would be appreciated. Thanks!

[DavidS127]

Based on your information, you had $1,200 of royalty income, $132 of owner expenses, and $9 of interest income (1,200-132+9=1,077). 

To enter in TurboTax, click the "magnifying glass Search" icon at top left and enter "royalties".  When you hit return/enter, you should see a "Jump to royalties" link.  Click that "Jump to royalties" and you will be at the starting point for entering royalty income.  Follow the interview question to enter the $1,200 of royalty income reported to you on a 1099-MISC. 

When you click Continue, you'll get a screen for your Depletion deduction.  You are allowed a 15% ($180) deduction for depletion.  Then,  click "More Expenses" and you will see a screen to enter your $132 of "owner deductions" as "Management Fees" on the "Enter Common Expenses" page.  Note the depletion deduction is also on that page.

The $9 of interest income can be added in the "Federal>Income & Expenses>Interest and Dividends section.

[dm8711]

Thanks for your help David.

1. So you are saying that I am eligible for the 15% depletion even though I am just one of about 600 mineral rights owners and not an actual land owner?

2. Also the path that I am taken to for the $9 of interest has me filling out a Schedule B.  I have nowhere near $1500 in interest to report, so do I really have to fill out that Schedule for $9, or can I just add it to my interest already reported on line 2b of my 1040? 

thanks again!

[MaryK4]

Yes, the 15% depletion is allowed for any mineral royalties.  You should be able to add the interest income under the 1099-INT without automatically creating the Schedule B.

@dm8711

[daedmo]

  It would appear the $9 Interest is INCLUDED in the $1700 that you pay taxes on after Dedus . If you add it on Sch B your paying taxes on the $9 twice (Big Deal).  Glad to see deduction for 15% Depletion mentioned.  

[daedmo]

Make that $1200