Question

Mineral rights taxes paid to another state

Forum|Forum|6 years ago
February 9, 2020
1 reply
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I live in MO and get a monthly check for oil mineral rights in TX. At the end of the year I get a tax statement from the county in TX where the mineral rights are located and am required to pay. Is there a place on my income taxes form to list the money I've already paid in taxes to the state of TX?

TurboTax Premier Online

DaveF1006

Yes, when you report this as Royalty income, There is a place in Turbo Tax where you can report expenses against your royalty income. County tax is an expense you can report to reduce your taxable income of your Royalty.

1)Select the federal tab, then go to wages and income.

2) Scroll to Rentals, Royalties and Farms click on the drop down that says show more

3) Select Rental Properties and Royalties (Sch E) Select start

4) Then you will go through a series of questions regarding your royalty property. Here is where you will enter your income or expenses. Note, your income will probably be already entered from another tax document. Here you would just enter your royalty information and enter the tax as an expense once you reach the expense portion of your royalty income.

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F

Frank_1

Follow up question - If I live in one state and receive an oil lease payment from another state, am I required to file/pay taxes on that oil lease bonus payment? I understand the oil lease bonus payment is income and gets included on my Federal taxes, just trying to figure out if I owe money to the state where the property is. (no oil is being produced, they just want to lease the minerals in case there is something) Thanks

PatriciaV

It depends on the state, as some states require everyone to file if they received income sourced in that state. Others have a minimum income requirement to file. You might check with the state where the mineral rights reside. Here's a list of State Departments of Revenue.

@Frank_1

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