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Wallstreet Esq., Tax Attorney
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My LLC receives a small amount of royalties from a oil/gas

Customer Question

My LLC receives a small amount of royalties from a oil/gas lease. How is this reported on Form 1065?
Submitted: 11 months ago.
Category: Tax
Expert:  Lane replied 11 months ago.



Assuming they are royalties not working interests, they go on line 7 of Sch K. The expenses go to the line for other deductions. This is where you enter severance taxes and tentative depletion. This does not go on Form 8825. If it is a working interest, it will go on page 1 and be subject to self employment tax.