1099-misc

[peggysioux]

Taxpayer receives a 1099-MISC showing rental income. Taxpayer receive income from an oil and natural gas company for allowing a pad on her property. Should income be reflected on schedule E or “other income” on 1040? The outcome is the same….taxable income, but would like to know how other tax preparers handle.

Peggy Sioux

[Lion]

If the 1099 reports Rental, I'd report it as a rental/Schedule E unless I had a good reason to report it elsewhere. I like to make it easy for the IRS, all else being equal.

[EvenKeelTax]

I'd guess it might be a royalty going on a sch E. I've seen those come in as royalties before. It is reported on the 1099 as rental income or royalty income box 1 or 2? Maybe either way doesn't matter much. It's been a few years since I've seen a 1099 from an oil and gas company, though. Sch E would be my vote either way, and your software might automatically send it to the sch E if you enter the 1099.

[ATSMAN]

No need to guess, look at the 1099-Misc and is it marked are Royalty, Rent, Other Income? Then proceed accordingly.

I have a client that leases a portion of land on his farm to Verizon for a tower and his 1099-Misc is marked Rent for $15,000 per year each year for the last 4 years.