My mineral rights are held in a sub-chapter S corporation. I’m working on the corporation’s 2022 return that is due today. The instructions for the corporation state NOT to account for the depletion allowance on the corporation’s return; rather, the shareholder accounts for the return in his or her 1040.
Here are my questions:
Do I figure the shareholder’s proportionate depletion allowance somewhere on the K-1? If so, where?
Where on the individual shareholder’s 1040 is the depletion allowance from the corporation’s royalty income reported?
In the past, I have deducted the depletion allowance on the corporation’s return; but it seems they changed the rules or I have done it wrong.
Many thanks.