| Actually, the income on the 1099-Misc should be corrected to read 1099-Misc ROYALTIES INCOME.
This is reported on Schedule E (Rental/Royalty Income) which is passive income. This is income that you received because you purchased at some point or other, mineral rights somewhere. It kind of like investing in an oil well somewhere and someone else is doing the drilling. That's why it is "Passive Income". You don't have to do anything. You just invested to the rights of the well, not the oil it produces. Also on the schedule E under the expense line "DEPLETION" take 15% of whatever the amount that the 1099 was issued for and deduct that because every year, they use up a little more of your "well". You do not pay social security or medicare on passive income and your losses are not limited by income. | 
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