Other than depletion allowance or safe harbor, do I have any other tax credits or deductions available for 2010 lease bonus?
I am pretty new at this having just negotiated my first lease bonus.
Dear Ms. Henderson,
Even though Lease Bonus is in the nature of advance royalty according to the IRS, there is no depletion allowance for those dollars.
It has always seemed to me that since the granting of an oil and gas lease is a sale of minerals in the nature of a determinable fee, you should be able to have a Section 1031 tax free exchange. Nobody agrees with me, though.
So you just have to add it to your job income and pay taxes?
Buddy Cotten said:
Dear Ms. Henderson,
Even though Lease Bonus is in the nature of advance royalty according to the IRS, there is no depletion allowance for those dollars.
It has always seemed to me that since the granting of an oil and gas lease is a sale of minerals in the nature of a determinable fee, you should be able to have a Section 1031 tax free exchange. Nobody agrees with me, though.
Buddy Cotten
www.cottenoilproperties.com
Liz Henderson said:
So you just have to add it to your job and taxes?
Buddy Cotten said:Dear Ms. Henderson,
Even though Lease Bonus is in the nature of advance royalty according to the IRS, there is no depletion allowance for those dollars.
It has always seemed to me that since the granting of an oil and gas lease is a sale of minerals in the nature of a determinable fee, you should be able to have a Section 1031 tax free exchange. Nobody agrees with me, though.
Buddy Cotten
www.cottenoilproperties.com
STEWART JONES LOVE said:
Liz Henderson said:So you just have to add it to your job and taxes?
Buddy Cotten said:Dear Ms. Henderson,
Even though Lease Bonus is in the nature of advance royalty according to the IRS, there is no depletion allowance for those dollars.
It has always seemed to me that since the granting of an oil and gas lease is a sale of minerals in the nature of a determinable fee, you should be able to have a Section 1031 tax free exchange. Nobody agrees with me, though.
Buddy Cotten
www.cottenoilproperties.com
I am a real estate broker and I included this income as part of my brokerage income - also expenses.