Tax Time

Does anyone know if we can deduct all the gathering expense, transportation cost, and such that is being taken from our gross volumn and deduct these expenses from our taxes? It is being taken from us so shouldn't it still be considered an expense?

 

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Oil & Gas ProPermalink Reply by dbob on January 28, 2013 at 2:01

Jo Ann - there is probably a lot of relevant information in the group "Death and Taxes"  You may want to join and try your query there.  

Permalink Reply by Jo Ann Carter on January 28, 2013 at 9:56

thanks


landownerPermalink Reply by Henry on January 29, 2013 at 1:08

Isn't the answer to this, "NO?" I'm no accountant, but it seems obvious. I'm assuming the operator deducted the expenses from Jo Ann's gross amount of sales, and paid her the net price in her royalty check. They took the deduction for her. If her 1099 is based on the net amount she was paid (and it should be), then what's to deduct?

Permalink Reply by Lew on January 29, 2013 at 4:46

Forms 1099 for oil and gas royalties are based on the gross amount, before deductions. They should be reported on your income tax return at that amount so the figure will match the IRS's records. Any deductions taken by the operator for severance taxes, gathering fees, etc. are expenses that can be deducted against the gross income. Many forms 1099 will give you a total of these deductions for the year, but not all operators provide that information.

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