Announcement

Collapse
No announcement yet.

Granting of Rights and Royalties

Collapse
X
Collapse
 
  • Page of 1
  • Filter
  • Time
  • Show
Clear All
new posts
Previous template Next
    #1

    Granting of Rights and Royalties

    I'm doing a return where the client received $2700 for selling the rights to drill on their property to an oil company for the term of 3 years.

    This wouldn't be eligible for the depletion allowance would it?
    Tags: None
    #2
    No production, no depletion

    It would not be eligible dor depletion. Working interest or royalty interest payments for production are eligible for depletion, not payments for the right to drill, etc.

    Comment

      #3
      It is on the 1099 as a Royalty...is why I asked. The figure was so much higher than in other years so I asked the client why? And it was because of the sale of the rights to drill for 3 years.

      Comment

      Previous template Next

      Disclaimer

      Collapse

      This message board allows participants to freely exchange ideas and opinions on areas concerning taxes. The comments posted are the opinions of participants and not that of Tax Materials, Inc. We make no claim as to the accuracy of the information and will not be held liable for any damages caused by using such information. Tax Materials, Inc. reserves the right to delete or modify inappropriate postings.

      Working...
      X