Is an oil & gas lease bonus payment entered into a Form 1040 as royalty or as rent?

I received a 100 MISC from a payor for a signing bouns on an oil & gas lease on my Texas property.  The 1099 MISC shows the bonus as "Rent" with an amount of the "Rent" or bonus.  Actual royalty payments are entered as royalty, but how is the signing bonus entered: rent or royalty.  How this is entered into TurboTax makes a huge difference in the amount of tax liability.
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    Turbo tax needs to fix this in there software.  The bonus for the lease will be shown on the 1099 misc as rent.  It should be shown on Schedule E- Supplemental Income and Loss, Part I, Line 3 as Rents Received.  You can find this at htt://homeguides.sfgate.com/file-bonus-mineral-rights-income-tax-7946.html  Even though the bonus is really not a rental.  It is definitely not royalty income because that has to do with production.  You can't take depletion on a bonus because it is not production.  Royalty allows for depletion because you only have so much oil or gas that can be produced from your interest.  I am going to push for turbo tax to fix this in their software and each of you should do the same.
    • I have the same issue, and believe "ahahn" is correct in his/her assessment.
    • so do I simply omit entering a new lease bonus as rent and add it later on Schedule E?
    • It should be entered on Schedule E as Rents received.  I don't remember how I finally got turbo tax to get it there, but I guess that there was enough trial and error to finally get it there.  Sorry that I'm not much help on that.
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    lease bonus is rent on sch E! No depletion.
    http://www.askchesapeake.com/Barnett-Shale/Royalty-Owners/Pages/Bonuses-and-Royalty-Payments.aspx

    Merit sent me a 1099 with lease bonus in box 3 , other income.
    I just entered it as rent, answered the goofy questions.

    Type was 'other' lease bonus
    Address was lease bonus xxx co. Tx


    I use 'forms' to go to the sch E worksheet after the 1099 is entered.
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      You would enter it as a rent.  Royalties are tied to the production.
      • How do you enter the rents and royalties?  This does not make sense - assume i have a 1099 misc that shows 1,000 in rents for a bonus received and 10,000 in royalties - how do you enter this?  As two seperate 1099's one amount in rents and the other in royalties?  If yes, this results in paying no taxes for this income.
      • I HAVE THE SAME QUESTION ... I HAVE TWO 1099 MISC FORMS .. ONE FOR EACH CONDITION.  THE ROYALTY IS RATHER STRAIGHT FORWARD TO INPUT BUT THE BONUS PAYMENT IS LISTED IN 1099 BOX ONE - RENTS  WHICH CAUSES ALL MANNER OF MISLEADING QUESTIONS SHOULD YOU FOLLOW THE RENTS TRAIL ... FINALLY CAUSES AN ERROR CONDITION IN THE FINAL TURBO TAX REVIEW.
      • Does anyone have an answer for this?
      • I entered the signing bonus under rent but checked the box for royalty property.  This has resulted in a Turbo Tax error message.  Any solutions to this dilemma as my home is not rental property it is royalty property from the oil and gas lease???  Turbo Tax Pro:  can you answer the turbo tax error message dilemma??
      • I am doing my 87 year old mother's tax's.  Last year, (2009) she had $1015 from two oil companies both were on 1099-misc statements, I enter them into Turbo tax without any problem.  This year she received 1099-Misc from the same two companies for $986. But apparently one of her uncles in North Dakota has passed away leave more oil rights. March of 2010 she received $6,000 bonus payment (total) for a three year lease with a different company.  She received another 1099-Misc for the $6,000 it's listed as Rent.  There's no address just a legal description for 160 acres out in the badlands of North Dakota.  I tried to enter the two companies that issued Royalties and this third company that paid her the $6k in rent.  Turbo tax took me down the path of rental property?? Then at the end it zeroed out the Royalties and the Rent.  Can anyone give me some advice?  Thank you,
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      I dont think you would want to enter the bonus as rent since it is treated like royalty income and you can take a 15% depletion allowance on the income. rj
      • I was just wondering if anyone got a definitive answer on this. I am trying to figure this out as well. when I input the 1099-msc file and input under rents it treats it as though I am renting my property which I am not. all this income was or is a bonus for signing a lease. I feel this program should be worded better or an additional option for be on here for this. because we are not renting a single family home, ect. my royalties have yet to start so I was not sure if the depletion was even an option. figured that maybe I need to change it to 0% because nothing has started, I don't know, can someone help with this. it would be greatly appreciated.
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