Tax deadline close for us, trying to find out if there is a tax write-off for vented gas from our oil wells. All 3 of our wells are in Mountrail County and producing, but gas is being flared from all wells. Is this considered a mineral production loss, & allows it to be deducted as a loss???
Thanks to anyone who can help.
Jerry Scott
Michigan
Dear Mr. Scott,
Vent gas is different than flared gas. Vent gas is a natural gas that continues to be released from crude oil after the crude is placed into tank batteries and rather than let it collect, it comes out of a stovepipe looking assembly. No gauges to measure vent gas. It has been referred to as "The smell of money."
As to flared gas, I think that you need to talk to a tax attorney. My part of the county is pretty much criss crossed with pipelines, so finding a market for gas is generally not a problem.
Thankyou Buddy, it is flared and shows up on our royalty statement. We are professionally having our tax's done today. If you dont mind I will update you on our attorney's answer? Thanks again.
Mr. Scott, I'd be interested in the answer if nobody else is.
jerry scott said:
Thankyou Buddy, it is flared and shows up on our royalty statement. We are professionally having our tax's done today. If you dont mind I will update you on our attorney's answer? Thanks again.
So this would be a write off if you werre force pooled? In fact, you would be a participant. Although, unwilling!
jerry scott said:
answer is if you are just a mineral owner flared gas cannot be written off. But if you invested and have interest in the drilling and oreration of the well, also if you invested in the location and drilling of the well. As in financially.