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Bob77
New Member

Oil lease 1099-Misc shows rents instead of royalties

I received a 1099-Misc for oil leasing rights to my property. The value is listed under "rents" and I put the value in accordingly, but when I go through the TurboTax questionnaire I answer as if it's a royalty. Is this right? I receive errors at the end with Smart Check by doing this method because TT thinks I'm renting my property.

2 Replies
MaryK1
Level 9

Oil lease 1099-Misc shows rents instead of royalties

Taxpayers typically receive a lease bonus from the party that extracts the natural resource in consideration for granting the lease.  The amount of bonus payments is “Rents” in Box 1 of the 1099-MISC and you report the income as rent on Schedule E.

  • Enter your 1099-MISC for rents in the 1099-MISC section as it appears. 
  • Check that it is for Rental income from the rental of real estate (Schedule E)
  • Add Lease Bonus on the screen to select the rental or royalty that generated this income, and check that.
  • Continue through the rest of the section.
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RonFromOKLA
Level 1

Oil lease 1099-Misc shows rents instead of royalties

Thanks for the help on answering the first part of the Lease Bonus payment.  Can you please address how to work thru setting up the Schedule E part of the program.  The questions seem to be geared toward a traditional rental (like house rental) but in our case it's a one time payment to the right to drill on our land/mineral rights.  Thanks in advance for your help.

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