cpabsd Posted April 7, 2009 Report Share Posted April 7, 2009 Client received $4250 in income from a company that was drilling to look for natural resources. They were actuall drilling on adjacent land but had to pay because they could be tapping into the resources from my clients property. They received a 1099 Misc with the amount in box 3 - other income. Does this go on line 21 or could it possibly be shown as long term capital gain? Thanks, Quote Link to comment Share on other sites More sharing options...
Bart Posted April 7, 2009 Report Share Posted April 7, 2009 Client received $4250 in income from a company that was drilling to look for natural resources. They were actuall drilling on adjacent land but had to pay because they could be tapping into the resources from my clients property. They received a 1099 Misc with the amount in box 3 - other income. Does this go on line 21 or could it possibly be shown as long term capital gain? Thanks, Did they buy an easement or just pay for the right to take his resources? Quote Link to comment Share on other sites More sharing options...
cpabsd Posted April 7, 2009 Author Report Share Posted April 7, 2009 Did they buy an easement or just pay for the right to take his resources? They were paid for the right of the company to come and look for the resources. Quote Link to comment Share on other sites More sharing options...
taxxcpa Posted April 8, 2009 Report Share Posted April 8, 2009 They were paid for the right of the company to come and look for the resources. It does not sound like rent and if it is not payment for production, it is not royalty, so it must be "other income" to go on line 21. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.