Question

Royalty income from mineral rights generated a schedule C

Forum|Forum|2 years ago
March 29, 2024
1 reply
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I entered my royalty income from mineral rights and somehow generated a Schedule C. I do not have a business so I do not need Schedule C. How do I correct my entry to generate a schedule E and make the schedule C go away?

DawnC

When you enter your 1099-MISC, with income in Box 2 - Royalties, TurboTax will ask what kind of royalty it is:

Investment income from property you own – This includes natural resources extracted from your property by a third party who leases your property, as well as royalties from intellectual property that you didn't create yourself. This gets reported on Schedule E.
Royalty income from your business, including artist royalties or operating a natural resources business (Schedule C) – This includes income from natural resources that you extract from your property as well as royalty payments from intellectual property you created as an inventor, writer, artist, and so forth. This gets reported on Schedule C.

You can delete the Schedule C and 1099 and re-enter the 1099-misc, but this time choose the Schedule E option if it is applicable.

How to delete forms in TurboTax Online

How to delete forms in TurboTax Desktop

Or you can start with the Schedule E: How to enter royalty income and expense on Schedule E - - this references 'rental' property, but you use these same instructions to enter a royalty property for Schedule E.

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R

rjm76Author

Thank you very much Dawn for your very clear and thorough response. I was able to delete Schedule C. One follow up question if you will. I do not operate the mineral resource business. We only receive a small royalty income for the mineral rights. Is this considered "Qualified Business Income?"

Thank you

D

DianeW777

It depends. If you don't consider yourself as involved in the extracting of the minerals, as you stated, then the income does not qualify for the qualified business income (QBI) deduction.