Texas Severance Tax (Eagle Ford Shale)

I have interest in McMullen County, Texas home of the eagle ford shale. I noticed a deduction on my statement titled TXSEV, its not a whole bunch but will add up over time. How does this affect the way I file taxes?

It will be a deduction for you when you file your Federal Income Tax return. You will enter it on Schedule E which is also where you will show the income. You will get to take off the McMullen county property tax you will get at the year's end and have to pay (pay in that calendar to take the deduction that year). You will also get to deduct 15% depetion and after this you will have the total taxable income figure. The oil company will send you a 1099 and it will have your income on it and should have the Texas Severance tax figure on it as well but keep the check stubbs as back up..............................

Thanks, trying to keep things orderly best I can as the barrels start flowing in. :wink: