Replies to This Discussion

Permalink Reply by Kathy Morgan on November 14, 2008 at 12:57

Mattie,

From the situation given I would have to say the following:

Question A: This is ordinary income subject to self employment no matter what the percentages or rights transfered because the person getting the money is an O&G operator and therefore "in the business" of oil. Capital gains is not a choice.

Question B: Louisiana is going to get their share no matter what kind of income it is, so yes a La return would have to be filed.

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Permalink Reply by Mattie on November 19, 2008 at 15:55

Thanks for the reply, Kathy. Just got this.

On Question A: So, is the fact that the money goes to an O&G operator the primary reason it's considered ordinary income? Or, are there other issues? Had not heard that individuals in their own field could not declare "capital gains" on their assets.

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Permalink Reply by Kathy Morgan on November 20, 2008 at 14:57

Yes the reason the money is self employment is because the recipient is in the oil business. The way I read he question it sounded like a business transaction. But if this is his personal property that he is selling (not leasing, see earlier discussion on the difference) he claims capital.

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Permalink Reply by Iris on August 21, 2008 at 2:25

Good ? & answer thx VSC & Kathy,,,from an out of state L.O.

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Permalink Reply by VSC DeSoto South on August 21, 2008 at 3:41

Thanks for the answer Kathy!
I thought it woudl be something like that.
I will check with my home state and see how much more money I have to lock up for April 2009.


Tiger....Good Luck

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Permalink Reply by laintexas on August 21, 2008 at 4:31

I'll have to read up on LA tax law, but is there a graduated tax similar to the Federal tax? In other words, does the income from the bonus have to equal a certain amount before you are taxed in LA, and are there income levels at which the tax rate increases?

Also, does the LA income tax law apply to royalties that are reported on the 1099-MISC?

Thanks.

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Permalink Reply by Kathy Morgan on August 22, 2008 at 5:44

Yes it is graduated based on the amount of income that is from LA. LA taxes all LA income of any kind including royalties, gaming, lease, rental, etc. This link gives you the basics on how non-resident income is figured and taxed:

http://www.rev.state.la.us/sections/individual/indincome.aspx

And this link will take you to the instructions on how the exact computations are done (see the chart on the bottom of the 4th page of the PDF file):

http://www.rev.state.la.us/forms/taxforms/IT540Bi(07).pdf

Hope that helps.

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Permalink Reply by Natch N3 on August 21, 2008 at 5:30

I live out of state as well and just today received my 'new property tax" assessment in the mail. Apparently, they have re-evaluated both my properties.

Natch N3

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Permalink Reply by Kepler on August 21, 2008 at 10:54

Turbotax handles this really well. I'm out of state but have been paying Louisiana taxes for years. If you use Turbotax, you get a free state with purchase and then you purchase another state. It will advise you how to take the credit in your home state assuming you are not one of the lucky ones who live in a no income tax state.

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Permalink Reply by Donna Thornton on August 22, 2008 at 8:46

Tax Cut does really well, also. Very user friendly.

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Permalink Reply by Timber Gal on August 21, 2008 at 14:22

May I ask if the re-evaluation went up considerably from before-Haynesville activity? I just received my assessment, but it looks similar to last year's.

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Permalink Reply by Donna Thornton on August 22, 2008 at 8:46

Very little increase. Almost not noticeable for me.

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