Shut in oil lease

[JackP1]

I have a non-producing gas lease and received a check when the well was "shut in", according to the terms of the lease.  I received a 1099 Misc showing this payment in Box 1 - Rents, which I believe is correct, BUT when I try to enter it in Turbo Tax 2023 (Deluxe DeskTop), the questions make no sense.  How do I enter this income?  I also have a 1099 Misc from the same operator for royalties from another well on same property, which I will report as Royalties Inccome.

[PatriciaV · Accepted solution]

Unfortunately, you can't report both rental income and royalty income under the same property on Schedule E.

To resolve this, enter two separate properties (activities) under Rental Properties & Royalties. One will be for the Box 1 Rent and the other for the royalties. 

To find this section in TurboTax, use the Search box at the top right side of the TurboTax header. Enter "schedule e", hit Enter, then click on "jump to schedule e".

Continue to the list of Rental/Royalty Properties.

Review the entries for the Rental Property that received income on Form 1099-MISC. Be sure you checked the box for "Rental" in the Property Profile section. This is the only section you need to complete other than income. Answer that it was rented all year and that you owned 100% of the property.

After you've completed this review, add the royalty property. You can keep the same address but enter a different property description and be sure to mark this as "Royalty". If you have expenses (like taxes) for this property, you can enter them under the royalty expense topic.

[JackP1]

Looks like what I needed.😊 Much obliged.