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.

posted

Connect with an expert

1 Best answer

Accepted Solutions

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

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"

View solution in original post

1 Reply

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

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"

Still have questions?

Questions are answered within a few hours on average.

Post a Question

*Must create login to post