Federal depletion is NOT allowed on a signing bonus, period. However, in the state of Oklahoma, lease bonus is considered income for purposes of depletion on the STATE income taxes only.
mike henry said:
Is the 15% depletion allowed on signing bonus? I ask because I’ve been told yes and no. My CPA says no because the 1099 lists it as rent and the 1099 provider says to their knowledge half of their MOs use it and half do not.
Federal reg book 535 to my understanding allows the depletion, Anybody have knowledge on this.