Kathy Morgan

Hi Kathy,
Wondering if you could send me pdf file on the items you are passing out for information regarding taxes etc.
Thank you

Anyone go to the BPCC thing last night? I was there and was very disappointed in the speakers. There was very little new info and most of the speakers were obviously on the "side" of the O&G companies. (Take "side" however you wish) I was out in the lobby handing out flyers about income tax effects of lease/royalty income and heard a lot of people leaving saying the same thing. The person they put up for "asset management" was good, if at this point what you are worried about is dying and how to dispose of your property/income. I'm glad I didn't have to talk in front of that many people, but I'm also glad I was there to give out the info I did, because a lot of people had no clue about it. (OK, done patting myself on the back now, LOL) But seriously, some good info but overall disappointing.

Very nice of you to offer Kathy. At the second meeting (which was a small crowd) there was a CPA there talking about tax issues from O&G revenue. The third meeting, which was the one posted here had a much larger turnout so as the group expands, we may be able to revisit the tax issue again since there are so many new people. I'll keep your comment on my board as a reminder and let the organizer know about it. Thanks so much for offering.
Scott

Do you have any suggestions as to what we could do to minimoze our tax burden? Also, how much do you typically charge for your tax preparation services?

Sorry, for the typo. Should have read "minimize".

Does that estimate figure include preparation of both federal and state, or is that just state?

Ok, cool. These taxes are giving me such a headache! lol It's starting to look like we are definitely going to need someone to prepare our taxes for us to make sure that we take all the credits we are eligible for and since we have never itemized before. I'll probably be contacting you closer it gets to the end of the year...if you don't mind. Which branch of H&R Block do you work at?
P.S. We are anticipating an offer towards the end of the year on 40 acres in DeSoto since that is when the current lease expires. Do you see any advantage to waiting to receive the bonus payment in Jan 09 as opposed to Dec 08, or would it really matter?

Hi Kathy,

Do you have a recommendation of a tax person in Portland Oregon? I thought you might know a seasoned one since you work with that firm.

Thanks,
Valerie
vdscott0305@msn.com
VSC 'O'

Good evening, Ms. Morgan. Someone had posted that you could take a deduction off your federal taxes if you paid your state taxes early. Is this true, and if so, how does that work?

Thanks for your quick response. Good to know. I guess we will be making the last payment by the end of the year instead of by Jan 15. =) We will miss out on a little bit of interest, but it's much better to be able to take the amount off our federal taxes.

I'm back! lol I have a few more questions for you. I really appreciate all of your help. It's priceless.

First question is about IRA's. My husband and I are looking to purchase 2 IRA's this year, each for $5000....1 for him and 1 for myself. This will be the first time that either of us has purchased an IRA. So far, I know that we will have to purchase a Traditional IRA b/c our adjusted gross income with exceed the amount allowed by the Roth. Will our tax deduction be equal to the amount of our IRA's ($10,000), or will we only be able to take a portion off our tax liability? Also, is the $5000 an annual limit? Are we allowed to contribute up to $5000 each year to each IRA, and if so, does that mean that if we contribute $5000 a piece to our IRA's that we will be able to deduct another $10,000 from our tax liability in 2009 as well (assuming the limit doesn't change for 09)?
The second question concerns Texas real estate and taxes. We are in the process of purchasing about 4.5 acres in Waskom, TX with a little efficiency cottage. We are planning to live in Shreveport for the remainder of 08. I know that we will still have to file LA state taxes, but how will we treat the purchase of the land in Texas or will this even be a factor? This will be a "cash purchase", so we will not be using realtors and there won't be any closing costs or anything like that. We will continue to file homestead on our house in Shreveport and claim "AG" on the land in Waskom. Not really sure what all that entails, but I know that we will be purchasing at least 1 goat. lol We're not planning on selling the property in Shreveport anytime within the near future. Instead, we have plans to use a management company to rent it out for us. Hopefully within the next 6 months to a year we will be building a log home on the land in Waskom. Will we still be able to file homestead on the property in Shreveport even though we won't be living there? Just curious. I know that you aren't in real estate, but I thought that you might have some knowledge of this area since it does have an affect on taxes (property taxes as opposed to income taxes).
Last question. How do you treat income from the sale of timber? Is this included in the adjusted gross income figure? We have about 50-60 acres worth of timber on the 3 properties (Caddo, DeSoto, and Waskom) that we are planning to sell within the near future.

Thanks so much for your help!

My husband and I are planning on sitting down with you at some point to discuss next year's tax return. We just have a lot going on right now...even with my husband not working. Once that settles down, we will give you a call to arrange a meeting. =)
My husband just filed a POA (Power of Attorney) for his mother at the Clerk's Office and was told that what he paid he could deduct from his taxes. I had never heard that. Why would that be considered a tax deduction? Also, we are in the process of filing a succession for his father's land so that it will be put in my husband's name. Can we also deduct those attorney's fees and court costs from our taxes? Thanks in advance!
Jessica

Ok, so, since we had to file the succession in order to get the land in DeSoto into my husband's name and out of his father's, and we received the lease bonus for the mineral rights leased on that land....can we deduct the succession attorney's fees from that income?

Also, in the POA we chose the option that said that we were allowed to comingle his mother's fund with my husband's. We did this b/c that would allow us to deposit the money his mother received as a lease bonus into our online savings account which has a 3.49% interest rate and that would allow both of us to draw more interest from that money. Since we will probably have enough interest in that account to have to claim it as income, could we also deduct the POA expenses from our taxes since it is the POA that allowed us to comingle those funds and led to the higher interest amount that is now taxable?

Thanks for your help!

My husband and I are discussing having wills drawn up for the two of us as well as his mother. Which is better to have, a living trust or a will?

Kathy,
I can't find any of the previous discussions about setting up an LLC for bonuses and royalties. Are there tax advantages for setting up an LLC for the purpose of gas royalties, lease bonuses, and any other agreements such as row's? We are negotiating a pipeline row now and are expecting royalties by the end of the year on a well that is being drilled now. Any suggestions would be welcome.

Thank you.

Kathy, My husband has a log truck and I was getting our taxes ready. I have a few question for you if you don't mind. Can I take off for work cloths and work boots, and can we take off if he went and picked up parts and ate out while he was there. I was not sure about the eating out but I did know that if he was working off and staying in a motel that all meals could be taken off... thanks for you input!
PS do you know any other right off that we can take other than fuel, parts , repairs, insurance on the truck, reg. fees , supplies, tools, mileages, tires... many thanks

Kathy,
Thanks so much for the information.. I have down load the book for the self-employed book from the IRS. another question married filing jointly what are the taxes be.. from 0 to 200,000.00 (like 10%, 21% 28% 31%) Lord, I hope you can understand what I am trying to ask...lol!!! many thanks

Kathy: I am a working interest owner in an existing lease. I sold my deep rights under the existing lease to a large company. The 1099 showed up with the amount in box 1-rents. Is that correct or should it be in box 7. I was hoping for long term capital gains.

Thanks for the info on rents vs. non-employee compensation for sale of the deep rights under an existing oil and gas lease. I forgot to mention that I am self-employed and do file a schedule C for oil and gas and other income.

I signed a bonus lease with a drilling company that has
sent me a 1099 /listing it as royalties. company want change it.what can I do to file correctly. Thanks

I am so sorry you were bitten by a snake. And it almost cost you your life. How frightening. I'm sorry you have nightmares. I can certainly understand why you don't like them either. I talked with someone who was bitten by a copperhead when she was a girl. Don't want to bring up memories for you but I'm sure it was very painful, like hers was.
Hugs!

Yes Gina ia doing a wonderful job looking out for the HOA and Espinita and E. Forrest interests. Did you notice the different colors of the maps? Why is it that Twin Cities is in Yellow and Chesapeake in Blue if what twin cities is tell us "We are Chesapeake", is in fact true? We know and have been telling everyone this all along.

Hey,

I saw that you are now a celebrity.

Congrats!

Hi Kathy - Just stopping by to hand out 5 points & a vote for "Featured Shaler." LOL Pay it forward!
Have a good weekend - sesport

Kathy, Thank you so much......... Things in mylife have been some what wacky for two years since my dad has been sick.. I have really done some stupid things.. Just not thinking straight or to much going on in my mind..... trying to deal with all of it has been hard. I truly thank you for this information. All sorts o things have been going through my mind... Afraid of Audit would be on us because i didn't sign. Again thank you !!!!!!!

Happy birthday Kathy, I'll be out of town all weekend, so I figured, I'd wish you an early one. Thanks for all your help and advice, you have been a huge asset to all of us on GHS.

Happy Birthday Ms. Kathy! I am coming back in to town tomorrow and may not be able to get on line.(LOL) Ithought DCH'ed was under town arrest & couldnt leave town. HA!HA!HA! Just kiddin DCH!

Hey Kathy,

Happy Birthday!

Hey, I saw on Dorcheated that you are going to NJ...what part? Happy B-Day!

I think I'm a little late, but Happy ? th Birthday! Here's to the wisdom that comes with age. I'm also now seeing Keith's comment ... we made 2 "pitstops" in NJ at McGuire years & years ago. Have a safe trip, too.

Best - sesport :0)

Hi, are you the tax lady who came to some of the East 80 Meetings? Also, I think I met you at BPCC handing out H&R Block materials. I was handing out the East 80 fliers. Bonnie

Congrats for making it to the top of the top 20 Featured Shalers! Enjoy the view ... LOL.

Best - sesport :0)

Thank you for the patriotic heart, Kathy. I really do like it and am proud to have it.

Ann

Your little granddaughter is so sweet because it runs in her family!

Thanks for the patriotic heart - I might implode if I couldn't come here every day and blow off steam!!

What an adorable picture!