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landownerPermalink Reply by Dorcheated A1 on December 16, 2008 at 9:42

Hi Kathy,
I didn't know you where a Master Tax Advisor.
I'm a Master Tax Avoider. Can a Advisor help a Avoider.
I guess on a serious note can't we get some money back this
year off the Stelly repeal

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landownerPermalink Reply by Kathy Morgan on September 25, 2008 at 11:17

Just a note to let you guys who may have been using my example on figuring taxes know I made an error. I said that the numbers I gave were for single persons and it was double for married filing jointly. MY BAD! It is double for the first 2 brackets then it changes. Here is the married table below. Sorry about that, I was looking at two different years worth of tables at the same time. The state was correct.

$0 - $16050 = 10%
$16051 - $65100 = 15%
$65101 - $131450 = 25%
$131451 - $200300 = 28%
$200300 - $357700 = 33%
$357701 and up = 35%


Kathy

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landownerPermalink Reply by Jeff on December 16, 2008 at 7:53

I could swear I heard at one of the information meetings that royalties are taxed as capital gains. Is this true and does it make a difference?

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landownerPermalink Reply by Kathy Morgan on December 16, 2008 at 9:34

Unfortunately not true. Royalities are taxed as regular income and therefore at your regular tax bracket. The advantage to them being taxed as capital gains (which they are NOT able to be) is that those rates are substantially lower then your regular rates.

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landownerPermalink Reply by intrepid on December 16, 2008 at 11:50

No allowance for depletion?

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landownerPermalink Reply by Kathy Morgan on December 16, 2008 at 20:36

You do get to take off expenses. Usually in a non-working interest, no say so in day to day operations, you get to take taxes taken before your check is issued, normally called severance taxes. You also get to take depletion which is easiest figured by using 15% of the gross income. Once you get the net amount on your Sch E, that amount goes to the 1040 and is treated as regular income.

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landownerPermalink Reply by Louzanne on September 25, 2008 at 11:28

http://www.irs.gov/formspubs/article/0,,id=164272,00.html

This site has all schedules listed. It is for 2007. Lets hope it does not go up for 2008!

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