We just sold a lease at a loss and want to show that on the tax statement. What information will our accountant need? Just the original bill of sale and this recent bill of sale?
Ask your accountants what they will need. They are the professional and will know what is required.
Among other things, your accountant will need to know your adjusted basis in theses minerals, which will include a reduction for depletion over time. Percentage depletion expense on your tax return reduces the mineral basis, but not below zero. This basis reduction is calculated property-by-property, depending on the related royalties for each tract. If this is a working interest, then you will have other factors affecting basis. Your accountant can help you figure this out.
Thank you for the information.
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