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Wendy Reed
Wendy Reed, Enrolled Agent
Category: Tax
Satisfied Customers: 3346
Experience:  15+ years tax preparation and tax advice.
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On my consolidated 1099 statement for my brokerage account

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On my consolidated 1099 statement for my brokerage account I had a charge for a "severence tax" on shares of a royalty trust I own. I assume these taxes are something I can deduct or perhaps get a tax credit for. Not sure where to account for them on my return?

Thank you for giving me the opportunity to assist you. I will give the best answer that I can with the information provided.


Hello there,


If the 1099MISC you received is for the gross amount before the severance taxes were withheld, you may deduct these on Line 16 of your Schedule E.


Severance tax is generally a tax on oil or gas royalties, and withheld from your royalties by the payer.


Deducting the tax on line 16 effectively removes this expense from your taxable income.


See instructions for Line 4:


Let me know if you need any additional information.

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