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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13314
Experience:  15years with H & R Block. Divisional leader, Instructor
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how is the sale of mineral rights reported on federal tax return,

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how is the sale of mineral rights reported on federal tax return, is it treated the same
as selling real estate?

Robin D :

Hello and thank you for using Just Answer

Robin D :

If you sell your complete interest in oil, gas, or mineral rights, the amount you receive is considered payment for the sale of section 1231 property, not royalty income. Under certain circumstances, the sale is subject to capital gain or loss treatment on Schedule D (Form 1040). You generally report royalties in Part I of Schedule E (Form 1040). However, if you hold an operating oil, gas, or mineral interest or are in business as a self-employed writer, inventor, artist, etc., report your income and expenses on Schedule C or Schedule C-EZ (Form 1040).

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