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I sold mineral rights in Oklahoma last year and received a…

Hi Pearl. My name...

Hi Pearl. My name is***** sold mineral rights in Oklahoma last year and received a 1099-Misc form from the purchasing mineral company. I reported that sale using form 4797, showing the sale price and the cost basis for those rights. I am concerned about not showing an entry for the 1099-Misc form. Am I correct in that the reporting of the sale price on the 4797 form precludes not entering the amount as other income in the 1099-Misc section? I've also been told that I should have received a 1099-B form instead, but that seems to be for sale of securities, not mineral rights.

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Answered in 16 minutes by:
3/23/2018
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,682
Experience: Taxes, Immigration, Labor Relations
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You correctly reported the sale of mineral rights form 4797.

Regarding reporting that payment to you - generally such transaction is reported on from 1099S

You should not expect form 1099B

Using form 1099misc might be not exactly correct but that is not rare...

Please verify if the payment is reported in box 3 and not in box 7.

If you have a concern about incorrect reporting - you may attach a note to your tax return with explanation of facts and reasoning - that will cover possible questions.

Let me know if you need any help.

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Customer reply replied 28 days ago
The payment was reported in box 3 of the 1099-misc. I file electronically, so I don't know that attaching a note is feasible. I jst don't want to draw attention to my return by not reporting the 1099-misc entry, hoping that the reporting of the sale on form 4797 will be sufficient.

You may add a note to your electronically filed tax return - that is not an issue.

As you already files - I woudl not suggest to send anything in additional at this point.

If for any reason - the IRS would question your reporting - you will reply and essentially will provide the same explanation.

But otherwise your reporting is correct and I would not expect any issues.

Lev
Lev, Tax Advisor
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