Oil Royalties

[pmedders]

I was advised by another tax preparer that oil royalties should go on Schedule C and I was hoping to get some feedback from other tax preparers. I thought that if the 1099 showed royalties than the earnings would go the Schedule E, but if the 1099 showed "other income", that the earnings would go to Schedule C. The tax preparer that gave me this information stated there had been some recent changes regarding oil royalties. Any input would be appreciated.

[jimmcg]

jim mcg

As far as I know that is correct. Royalties generally represent income from mineral interests and go on Sch E. Income from working interests are trade or business income and generally go on Sch C. Would appreciate update (with cites) if there are any newer interpretations.