Got a 1099 income I received for oil and gas lease bonus. They classified the income as rent under box 1, the amount is $5052.63. Can I depreciate expenses related to my house, such as utilities, repairs under rental property? It's my primary residence.
(Asked 01/31/09, Views 107)
I may have answered my own question to some extent. My father in law, who lives close by, got a signing bonus from a different company for his oil and gas lease, and it was also classified as rental income. My guess is that since we have not actually received any checks from natural gas production , the leasing companies classified the signing bonus as "rental income" as opposed to "royalty income". In essence , they are renting/leasing our property with the option to drill within the lease time frame. My question would still be, if I am to classify this as "rental income" on my primary residence, am I able to depreciate common expenses, such as utilities, repairs, etc.. I do understand that real estate taxes and mortgage interest would go in a different spot, since this is my primary residence.