Schedule E - Line 19 Other Expenses

This is the first time I have tried to do my taxes myself. I am not sure I have taken all the deductions I can on my royalty interests. I deducted “production taxes” as shown on my 1099. Also I deducted school district and county taxes and depletion (15% of the gross as I understand). I see on my previous years forms, that my accountant has also deducted advalorem tax, but I don’t know where he got this. His deductions add up to more, using a form (PG01) to go with Schedule E than I am getting, comparatively. On it, under “Other Expenses” he lists Advalorem tax, GP tax, LOE tax. I don’t know what these mean but assume GP and LOE are production and school district/county taxes but where do I find advalorem taxes? Can anyone give me some feedback on this? Help -I’m down to the wire because I couldn’t face this!

No accountant, so take this for what it’s worth. You say you’ve deducted the school district and county taxes. Are you talking about taxes charged on your producing mineral interest or on the land itself (assuming you also own the surface). The ad valorem taxes you asked about are the taxes the various tax entities charge based on the assessed value of the land or personal property. If your accountant wasn’t basing those earlier tax deductions on tax bills that you had received I don’t know where he could have gotten them.

If you have paid property taxes on the land where that production is located and you don’t have other income to offset those taxes against then I would deduct them on Schedule E, along with the taxes you paid on that producing mineral interest, up to the limit of the royalty income you received.

Are you sure the tax amounts you paid on this property weren’t higher in the earlier years that your accountant handled and PG01 didn’t mean page 1, where he was listing the various taxes?

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