Oil/Gas Lease Income Help


T

Tango

Oh My Lord! I usually have a 3 page tax return. This year I leased for 3
years mineral rights to a prospector company. You would think the IRS wants
a full congrassional disclosure for the $166! My normal 3 page return is
now 14 pages! The only area I can figure it goes is business income,
schedule C. Turbo Tax wants to know MY business, what is MY tax ID, what is
my business code and on and on. I just want to tell them I made $166,
here's your lousy 17% without the extra hassle.

Is there a different form?

Thanks,
Tango
 
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P

Paul Thomas, CPA

Tango said:
Oh My Lord! I usually have a 3 page tax return. This year I leased for 3
years mineral rights to a prospector company. You would think the IRS
wants a full congrassional disclosure for the $166! My normal 3 page
return is now 14 pages! The only area I can figure it goes is business
income, schedule C. Turbo Tax wants to know MY business, what is MY tax
ID, what is my business code and on and on. I just want to tell them I
made $166, here's your lousy 17% without the extra hassle.

Is there a different form?




It sounds like Schedule E, rental property - in this case being land (or the
stuff underground).

You're not in the mining business.
 
T

Tango

I called the guy and asked. He didn't have an answer but he did leave me a
clue. He said he only sends out Form 1099s if the amount is over $500. If
he makes no record of it then the IRS will have no record of it. Perhaps
less thatn 5K is not worth the IRSs time. I will have to look into that.

Tango
 
P

Paul Thomas, CPA

Tango said:
I called the guy and asked. He didn't have an answer but he did leave me a
clue. He said he only sends out Form 1099s if the amount is over $500. If
he makes no record of it then the IRS will have no record of it. Perhaps
less thatn 5K is not worth the IRSs time. I will have to look into that.



The fact that 1099 forms are not required to be issued for payments of less
than $600 doesn't mean you don't have to report it as income.
 
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S

Shyster1040

Since you don't appear to be in the business of leasing out oil and gas
properties, your income from the oil & gas leases (aka royalties) should
be reported on Sch. E. You would not have received a Form 1099-MISC
unless the payments to you for 2006 aggregated $600 or more.
 

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