Royalty income

[jph133]

I've seen this before but it still does not answer my problem.  I have some gas royalties and it does direct me to schedule E but I keep getting errors when I try to complete my taxes.  I put my address on the location line and that it is a single family dwelling.  It then asks me all kinds of questions as if it were rental.  ie:  How many days rented and How many days for personal use.  How do I get past this?  Then it does not like the amount I entered from the 1099-Misc.  Can you please help?

[JohnB5677]

If you have Royalties, you should not have an entry in box 1 (Rents) of your 1099-MISC.  The entry should be in box 2 (Royalties).  If you make that adjustment the rental questions should stop.

[jph133]

I started the form over.  I still have an error.  Is this activity a qualified trade or business?  I answered no and it loops again.

[jph133]

I finally got it completed by trial and error.  I guess I clicked enough buttons and it finally accepted it.  I will say that I did not get very good advice  from Turbotax to get it completed.  You really needed to be more specific on what fields needed to be filled in for it to complete.

[PatriciaV]

It depends. If you own a working interest in an oil & gas property, the income would be eligible for QBI. However, most royalty properties are held for investment, which is not eligible for QBI.

[vz8m2r]

JohnB5677 is correct in that your royalties should be entered in 1099-MISC in box 2 (Royalties). Once you enter your 1099-MISC information, the TurboTax interview process should move you to a "Royalty Summary" list/menu. Under "Property Profile" of that list/menu, click "Update". Make sure "Royalty Property or Payment" is selected and NOT "Rental Property". For "Royalty Description" follow the TurboTax suggestion (I used "Oil & Gas Royalties XXX County" where XXX is the name of the county). For the "Royalty Address", DON'T enter your address - DO enter the address where the royalty is located (I used "XXX County", "YYY" for the city" and "ZZZ" for the state - you don't need a zip).