critical diagnostic: A net loss has been detected on a passive royalty.

[pat]

Not sure what the issue is what needs to be manually calculated. 

I have an individual return with 3, 1099s for royalty income from oil. I am getting critical diagnostics on 2 of them that says: “Sch E- a net loss has been detected on a passive royalty. To get the correct treatment, remove passive royalty indicator and calculate the amounts manually.”

There was no prior year unallowed passive losses. There was depletion carryover from 2018 and 2019 that is being carried over to 2020. Net passive income from the 3 royalties is positive.

The depletion carryover from 2018 is causing the loss for each of these but the depletion is being carried over to 2020.

Do you know what has to be calculated? There is no depletion on the schedule E all 3 carry their depletion amounts forward due to income limitations.

The full diagnostic reads as follows, but a search on the reference number does not return any results: A net loss has been detected on a passive royalty. To get the correct treatment, remove 2 from passive royalty and calculate the amounts manually. ref #45049