I am leasing a few acres in Howard County, TX would like to know if anyone knows approximately how much tax will be due on the $13,000 signing bonus. Thanks!
Your standard Federal income tax rate and any Sate Income Taxes, if any. Hope you had a lawyer look over the lease.
Report on 1040 Schedule E. You can deduct expenses related to this income, legal fees etc.
Thanks for the input. I did not have a lawyer look over the lease...it is just a standard lease and I am only talking about 5 mineral acres. The company originally offered $500/acre but I settled on $800/acre. I haven't signed the lease yet, though. The mineral rights are mine and my two sisters with me distributing the money and shouldering the tax burden...but of course I withhold the tax amount from their part. Which is why I wanted to know about how much the taxes will be.
W Kornmayer said:
Your standard Federal income tax rate and any Sate Income Taxes, if any. Hope you had a lawyer look over the lease.
I would still get a lawyer to look at it. I did with my lease and not only did he negotiate a much better price than was offered but additional items like what would be withheld and other terms in the lease like no automatic extension if it didn't drill etc.. It was well worth the money.
Thanks again! I think I will contact a lawyer!
talk to your CPA. You should be able to send your sisters each a 1099 at the end of the year so they can report their share of the income. The tax code does not allow you to report income of others. It may be easier to have your attorney divide the interest among all of you.