Hello, I have a question. I received my 1099. What is Owner Deductions? Thanks in advance for any help. I have oil rights in Doddridge County W.V. Thank You & Have a good day
The normal deductions are for state severance tax, possibly federal taxes, post production costs, etc. You should have a complete breakdown of those deductions on your statements that come with your royalty checks. Save those statements for seven years for IRS purposes. You want to compare the 12 months of statements to the IRS 1099.
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M Barnes , You are awesome !! Always so helpful !!
Can you deduct costs of administering the rights/royalties? In my case with lots of small wells, the cost of keeping track of it is probably more than the royalty!
Talk to your CPA. They know the rules.
What line are you putting these expenses on your Schedule E?
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