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Filing 1040ez Form

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Filing 1040ez Form

Filing 1040ez form 9. Filing 1040ez form   Depletion Table of Contents Introduction Topics - This chapter discusses: Who Can Claim Depletion? Mineral PropertyCost Depletion Percentage Depletion Oil and Gas Wells Mines and Geothermal Deposits Lessor's Gross Income TimberTimber units. Filing 1040ez form Depletion unit. Filing 1040ez form Introduction Depletion is the using up of natural resources by mining, drilling, quarrying stone, or cutting timber. Filing 1040ez form The depletion deduction allows an owner or operator to account for the reduction of a product's reserves. Filing 1040ez form There are two ways of figuring depletion: cost depletion and percentage depletion. Filing 1040ez form For mineral property, you generally must use the method that gives you the larger deduction. Filing 1040ez form For standing timber, you must use cost depletion. Filing 1040ez form Topics - This chapter discusses: Who can claim depletion Mineral property Timber Who Can Claim Depletion? If you have an economic interest in mineral property or standing timber, you can take a deduction for depletion. Filing 1040ez form More than one person can have an economic interest in the same mineral deposit or timber. Filing 1040ez form In the case of leased property, the depletion deduction is divided between the lessor and the lessee. Filing 1040ez form You have an economic interest if both the following apply. Filing 1040ez form You have acquired by investment any interest in mineral deposits or standing timber. Filing 1040ez form You have a legal right to income from the extraction of the mineral or cutting of the timber to which you must look for a return of your capital investment. Filing 1040ez form A contractual relationship that allows you an economic or monetary advantage from products of the mineral deposit or standing timber is not, in itself, an economic interest. Filing 1040ez form A production payment carved out of, or retained on the sale of, mineral property is not an economic interest. Filing 1040ez form Individuals, corporations, estates, and trusts who claim depletion deductions may be liable for alternative minimum tax. Filing 1040ez form Basis adjustment for depletion. Filing 1040ez form   You must reduce the basis of your property by the depletion allowed or allowable, whichever is greater. Filing 1040ez form Mineral Property Mineral property includes oil and gas wells, mines, and other natural deposits (including geothermal deposits). Filing 1040ez form For this purpose, the term “property” means each separate interest you own in each mineral deposit in each separate tract or parcel of land. Filing 1040ez form You can treat two or more separate interests as one property or as separate properties. Filing 1040ez form See section 614 of the Internal Revenue Code and the related regulations for rules on how to treat separate mineral interests. Filing 1040ez form There are two ways of figuring depletion on mineral property. Filing 1040ez form Cost depletion. Filing 1040ez form Percentage depletion. Filing 1040ez form Generally, you must use the method that gives you the larger deduction. Filing 1040ez form However, unless you are an independent producer or royalty owner, you generally cannot use percentage depletion for oil and gas wells. Filing 1040ez form See Oil and Gas Wells , later. Filing 1040ez form Cost Depletion To figure cost depletion you must first determine the following. Filing 1040ez form The property's basis for depletion. Filing 1040ez form The total recoverable units of mineral in the property's natural deposit. Filing 1040ez form The number of units of mineral sold during the tax year. Filing 1040ez form Basis for depletion. Filing 1040ez form   To figure the property's basis for depletion, subtract all the following from the property's adjusted basis. Filing 1040ez form Amounts recoverable through: Depreciation deductions, Deferred expenses (including deferred exploration and development costs), and Deductions other than depletion. Filing 1040ez form The residual value of land and improvements at the end of operations. Filing 1040ez form The cost or value of land acquired for purposes other than mineral production. Filing 1040ez form Adjusted basis. Filing 1040ez form   The adjusted basis of your property is your original cost or other basis, plus certain additions and improvements, and minus certain deductions such as depletion allowed or allowable and casualty losses. Filing 1040ez form Your adjusted basis can never be less than zero. Filing 1040ez form See Publication 551, Basis of Assets, for more information on adjusted basis. Filing 1040ez form Total recoverable units. Filing 1040ez form   The total recoverable units is the sum of the following. Filing 1040ez form The number of units of mineral remaining at the end of the year (including units recovered but not sold). Filing 1040ez form The number of units of mineral sold during the tax year (determined under your method of accounting, as explained next). Filing 1040ez form   You must estimate or determine recoverable units (tons, pounds, ounces, barrels, thousands of cubic feet, or other measure) of mineral products using the current industry method and the most accurate and reliable information you can obtain. Filing 1040ez form You must include ores and minerals that are developed, in sight, blocked out, or assured. Filing 1040ez form You must also include probable or prospective ores or minerals that are believed to exist based on good evidence. Filing 1040ez form But see Elective safe harbor for owners of oil and gas property , later. Filing 1040ez form Number of units sold. Filing 1040ez form   You determine the number of units sold during the tax year based on your method of accounting. Filing 1040ez form Use the following table to make this determination. Filing 1040ez form    IF you  use . Filing 1040ez form . Filing 1040ez form . Filing 1040ez form THEN the units sold during the year are . Filing 1040ez form . Filing 1040ez form . Filing 1040ez form The cash method of accounting The units sold for which you receive payment during the tax year (regardless of the year of sale). Filing 1040ez form An accrual method of accounting The units sold based on your inventories and method of accounting for inventory. Filing 1040ez form   The number of units sold during the tax year does not include any for which depletion deductions were allowed or allowable in earlier years. Filing 1040ez form Figuring the cost depletion deduction. Filing 1040ez form   Once you have figured your property's basis for depletion, the total recoverable units, and the number of units sold during the tax year, you can figure your cost depletion deduction by taking the following steps. Filing 1040ez form Step Action Result 1 Divide your property's basis for depletion by total recoverable units. Filing 1040ez form Rate per unit. Filing 1040ez form 2 Multiply the rate per unit by units sold during the tax year. Filing 1040ez form Cost depletion deduction. Filing 1040ez form You must keep accounts for the depletion of each property and adjust these accounts each year for units sold and depletion claimed. Filing 1040ez form Elective safe harbor for owners of oil and gas property. Filing 1040ez form   Instead of using the method described earlier to determine the total recoverable units, you can use an elective safe harbor. Filing 1040ez form If you choose the elective safe harbor, the total recoverable units equal 105% of a property's proven reserves (both developed and undeveloped). Filing 1040ez form For details, see Revenue Procedure 2004-19 on page 563 of Internal Revenue Bulletin 2004-10, available at www. Filing 1040ez form irs. Filing 1040ez form gov/pub/irs-irbs/irb04-10. Filing 1040ez form pdf. Filing 1040ez form   To make the election, attach a statement to your timely filed (including extensions) original return for the first tax year for which the safe harbor is elected. Filing 1040ez form The statement must indicate that you are electing the safe harbor provided by Revenue Procedure 2004-19. Filing 1040ez form The election, if made, is effective for the tax year in which it is made and all later years. Filing 1040ez form It cannot be revoked for the tax year in which it is elected, but may be revoked in a later year. Filing 1040ez form Once revoked, it cannot be re-elected for the next 5 years. Filing 1040ez form Percentage Depletion To figure percentage depletion, you multiply a certain percentage, specified for each mineral, by your gross income from the property during the tax year. Filing 1040ez form The rates to be used and other rules for oil and gas wells are discussed later under Independent Producers and Royalty Owners and under Natural Gas Wells . Filing 1040ez form Rates and other rules for percentage depletion of other specific minerals are found later in Mines and Geothermal Deposits . Filing 1040ez form Gross income. Filing 1040ez form   When figuring percentage depletion, subtract from your gross income from the property the following amounts. Filing 1040ez form Any rents or royalties you paid or incurred for the property. Filing 1040ez form The part of any bonus you paid for a lease on the property allocable to the product sold (or that otherwise gives rise to gross income) for the tax year. Filing 1040ez form A bonus payment includes amounts you paid as a lessee to satisfy a production payment retained by the lessor. Filing 1040ez form   Use the following fraction to figure the part of the bonus you must subtract. Filing 1040ez form No. Filing 1040ez form of units sold in the tax year Recoverable units from the property × Bonus Payments For oil and gas wells and geothermal deposits, more information about the definition of gross income from the property is under Oil and Gas Wells , later. Filing 1040ez form For other property, more information about the definition of gross income from the property is under Mines and Geothermal Deposits , later. Filing 1040ez form Taxable income limit. Filing 1040ez form   The percentage depletion deduction generally cannot be more than 50% (100% for oil and gas property) of your taxable income from the property figured without the depletion deduction and the domestic production activities deduction. Filing 1040ez form   Taxable income from the property means gross income from the property minus all allowable deductions (except any deduction for depletion or domestic production activities) attributable to mining processes, including mining transportation. Filing 1040ez form These deductible items include, but are not limited to, the following. Filing 1040ez form Operating expenses. Filing 1040ez form Certain selling expenses. Filing 1040ez form Administrative and financial overhead. Filing 1040ez form Depreciation. Filing 1040ez form Intangible drilling and development costs. Filing 1040ez form Exploration and development expenditures. Filing 1040ez form Deductible taxes (see chapter 5), but not taxes that you capitalize or take as a credit. Filing 1040ez form Losses sustained. Filing 1040ez form   The following rules apply when figuring your taxable income from the property for purposes of the taxable income limit. Filing 1040ez form Do not deduct any net operating loss deduction from the gross income from the property. Filing 1040ez form Corporations do not deduct charitable contributions from the gross income from the property. Filing 1040ez form If, during the year, you dispose of an item of section 1245 property that was used in connection with mineral property, reduce any allowable deduction for mining expenses by the part of any gain you must report as ordinary income that is allocable to the mineral property. Filing 1040ez form See section 1. Filing 1040ez form 613-5(b)(1) of the regulations for information on how to figure the ordinary gain allocable to the property. Filing 1040ez form Oil and Gas Wells You cannot claim percentage depletion for an oil or gas well unless at least one of the following applies. Filing 1040ez form You are either an independent producer or a royalty owner. Filing 1040ez form The well produces natural gas that is either sold under a fixed contract or produced from geopressured brine. Filing 1040ez form If you are an independent producer or royalty owner, see Independent Producers and Royalty Owners , next. Filing 1040ez form For information on the depletion deduction for wells that produce natural gas that is either sold under a fixed contract or produced from geopressured brine, see Natural Gas Wells , later. Filing 1040ez form Independent Producers and Royalty Owners If you are an independent producer or royalty owner, you figure percentage depletion using a rate of 15% of the gross income from the property based on your average daily production of domestic crude oil or domestic natural gas up to your depletable oil or natural gas quantity. Filing 1040ez form However, certain refiners, as explained next, and certain retailers and transferees of proven oil and gas properties, as explained next, cannot claim percentage depletion. Filing 1040ez form For information on figuring the deduction, see Figuring percentage depletion , later. Filing 1040ez form Refiners who cannot claim percentage depletion. Filing 1040ez form   You cannot claim percentage depletion if you or a related person refine crude oil and you and the related person refined more than 75,000 barrels on any day during the tax year based on average (rather than actual) daily refinery runs for the tax year. Filing 1040ez form The average daily refinery run is computed by dividing total refinery runs for the tax year by the total number of days in the tax year. Filing 1040ez form Related person. Filing 1040ez form   You and another person are related persons if either of you holds a significant ownership interest in the other person or if a third person holds a significant ownership interest in both of you. Filing 1040ez form For example, a corporation, partnership, estate, or trust and anyone who holds a significant ownership interest in it are related persons. Filing 1040ez form A partnership and a trust are related persons if one person holds a significant ownership interest in each of them. Filing 1040ez form For purposes of the related person rules, significant ownership interest means direct or indirect ownership of 5% or more in any one of the following. Filing 1040ez form The value of the outstanding stock of a corporation. Filing 1040ez form The interest in the profits or capital of a partnership. Filing 1040ez form The beneficial interests in an estate or trust. Filing 1040ez form Any interest owned by or for a corporation, partnership, trust, or estate is considered to be owned directly both by itself and proportionately by its shareholders, partners, or beneficiaries. Filing 1040ez form Retailers who cannot claim percentage depletion. Filing 1040ez form   You cannot claim percentage depletion if both the following apply. Filing 1040ez form You sell oil or natural gas or their by-products directly or through a related person in any of the following situations. Filing 1040ez form Through a retail outlet operated by you or a related person. Filing 1040ez form To any person who is required under an agreement with you or a related person to use a trademark, trade name, or service mark or name owned by you or a related person in marketing or distributing oil, natural gas, or their by-products. Filing 1040ez form To any person given authority under an agreement with you or a related person to occupy any retail outlet owned, leased, or controlled by you or a related person. Filing 1040ez form The combined gross receipts from sales (not counting resales) of oil, natural gas, or their by-products by all retail outlets taken into account in (1) are more than $5 million for the tax year. Filing 1040ez form   For the purpose of determining if this rule applies, do not count the following. Filing 1040ez form Bulk sales (sales in very large quantities) of oil or natural gas to commercial or industrial users. Filing 1040ez form Bulk sales of aviation fuels to the Department of Defense. Filing 1040ez form Sales of oil or natural gas or their by-products outside the United States if none of your domestic production or that of a related person is exported during the tax year or the prior tax year. Filing 1040ez form Related person. Filing 1040ez form   To determine if you and another person are related persons, see Related person under Refiners who cannot claim percentage depletion, earlier. Filing 1040ez form Sales through a related person. Filing 1040ez form   You are considered to be selling through a related person if any sale by the related person produces gross income from which you may benefit because of your direct or indirect ownership interest in the person. Filing 1040ez form   You are not considered to be selling through a related person who is a retailer if all the following apply. Filing 1040ez form You do not have a significant ownership interest in the retailer. Filing 1040ez form You sell your production to persons who are not related to either you or the retailer. Filing 1040ez form The retailer does not buy oil or natural gas from your customers or persons related to your customers. Filing 1040ez form There are no arrangements for the retailer to acquire oil or natural gas you produced for resale or made available for purchase by the retailer. Filing 1040ez form Neither you nor the retailer knows of or controls the final disposition of the oil or natural gas you sold or the original source of the petroleum products the retailer acquired for resale. Filing 1040ez form Transferees who cannot claim percentage depletion. Filing 1040ez form   You cannot claim percentage depletion if you received your interest in a proven oil or gas property by transfer after 1974 and before October 12, 1990. Filing 1040ez form For a definition of the term “transfer,” see section 1. Filing 1040ez form 613A-7(n) of the regulations. Filing 1040ez form For a definition of the term “interest in proven oil or gas property,” see section 1. Filing 1040ez form 613A-7(p) of the regulations. Filing 1040ez form Figuring percentage depletion. Filing 1040ez form   Generally, as an independent producer or royalty owner, you figure your percentage depletion by computing your average daily production of domestic oil or gas and comparing it to your depletable oil or gas quantity. Filing 1040ez form If your average daily production does not exceed your depletable oil or gas quantity, you figure your percentage depletion by multiplying the gross income from the oil or gas property (defined later) by 15%. Filing 1040ez form If your average daily production of domestic oil or gas exceeds your depletable oil or gas quantity, you must make an allocation as explained later under Average daily production. Filing 1040ez form   In addition, there is a limit on the percentage depletion deduction. Filing 1040ez form See Taxable income limit , later. Filing 1040ez form Average daily production. Filing 1040ez form   Figure your average daily production by dividing your total domestic production of oil or gas for the tax year by the number of days in your tax year. Filing 1040ez form Partial interest. Filing 1040ez form   If you have a partial interest in the production from a property, figure your share of the production by multiplying total production from the property by your percentage of interest in the revenues from the property. Filing 1040ez form   You have a partial interest in the production from a property if you have a net profits interest in the property. Filing 1040ez form To figure the share of production for your net profits interest, you must first determine your percentage participation (as measured by the net profits) in the gross revenue from the property. Filing 1040ez form To figure this percentage, you divide the income you receive for your net profits interest by the gross revenue from the property. Filing 1040ez form Then multiply the total production from the property by your percentage participation to figure your share of the production. Filing 1040ez form Example. Filing 1040ez form Javier Robles owns oil property in which Pablo Olmos owns a 20% net profits interest. Filing 1040ez form During the year, the property produced 10,000 barrels of oil, which Javier sold for $200,000. Filing 1040ez form Javier had expenses of $90,000 attributable to the property. Filing 1040ez form The property generated a net profit of $110,000 ($200,000 − $90,000). Filing 1040ez form Pablo received income of $22,000 ($110,000 × . Filing 1040ez form 20) for his net profits interest. Filing 1040ez form Pablo determined his percentage participation to be 11% by dividing $22,000 (the income he received) by $200,000 (the gross revenue from the property). Filing 1040ez form Pablo determined his share of the oil production to be 1,100 barrels (10,000 barrels × 11%). Filing 1040ez form Depletable oil or natural gas quantity. Filing 1040ez form   Generally, your depletable oil quantity is 1,000 barrels. Filing 1040ez form Your depletable natural gas quantity is 6,000 cubic feet multiplied by the number of barrels of your depletable oil quantity that you choose to apply. Filing 1040ez form If you claim depletion on both oil and natural gas, you must reduce your depletable oil quantity (1,000 barrels) by the number of barrels you use to figure your depletable natural gas quantity. Filing 1040ez form Example. Filing 1040ez form You have both oil and natural gas production. Filing 1040ez form To figure your depletable natural gas quantity, you choose to apply 360 barrels of your 1000-barrel depletable oil quantity. Filing 1040ez form Your depletable natural gas quantity is 2. Filing 1040ez form 16 million cubic feet of gas (360 × 6000). Filing 1040ez form You must reduce your depletable oil quantity to 640 barrels (1000 − 360). Filing 1040ez form If you have production from marginal wells, see section 613A(c)(6) of the Internal Revenue Code to figure your depletable oil or natural gas quantity. Filing 1040ez form Also, see Notice 2012-50, available at www. Filing 1040ez form irs. Filing 1040ez form gov/irb/2012–31_IRB/index. Filing 1040ez form html. Filing 1040ez form Business entities and family members. Filing 1040ez form   You must allocate the depletable oil or gas quantity among the following related persons in proportion to each entity's or family member's production of domestic oil or gas for the year. Filing 1040ez form Corporations, trusts, and estates if 50% or more of the beneficial interest is owned by the same or related persons (considering only persons that own at least 5% of the beneficial interest). Filing 1040ez form You and your spouse and minor children. Filing 1040ez form A related person is anyone mentioned in the related persons discussion under Nondeductible loss in chapter 2 of Publication 544, except that for purposes of this allocation, item (1) in that discussion includes only an individual, his or her spouse, and minor children. Filing 1040ez form Controlled group of corporations. Filing 1040ez form   Members of the same controlled group of corporations are treated as one taxpayer when figuring the depletable oil or natural gas quantity. Filing 1040ez form They share the depletable quantity. Filing 1040ez form A controlled group of corporations is defined in section 1563(a) of the Internal Revenue Code, except that, for this purpose, the stock ownership requirement in that definition is “more than 50%” rather than “at least 80%. Filing 1040ez form ” Gross income from the property. Filing 1040ez form   For purposes of percentage depletion, gross income from the property (in the case of oil and gas wells) is the amount you receive from the sale of the oil or gas in the immediate vicinity of the well. Filing 1040ez form If you do not sell the oil or gas on the property, but manufacture or convert it into a refined product before sale or transport it before sale, the gross income from the property is the representative market or field price (RMFP) of the oil or gas, before conversion or transportation. Filing 1040ez form   If you sold gas after you removed it from the premises for a price that is lower than the RMFP, determine gross income from the property for percentage depletion purposes without regard to the RMFP. Filing 1040ez form   Gross income from the property does not include lease bonuses, advance royalties, or other amounts payable without regard to production from the property. Filing 1040ez form Average daily production exceeds depletable quantities. Filing 1040ez form   If your average daily production for the year is more than your depletable oil or natural gas quantity, figure your allowance for depletion for each domestic oil or natural gas property as follows. Filing 1040ez form Figure your average daily production of oil or natural gas for the year. Filing 1040ez form Figure your depletable oil or natural gas quantity for the year. Filing 1040ez form Figure depletion for all oil or natural gas produced from the property using a percentage depletion rate of 15%. Filing 1040ez form Multiply the result figured in (3) by a fraction, the numerator of which is the result figured in (2) and the denominator of which is the result figured in (1). Filing 1040ez form This is your depletion allowance for that property for the year. Filing 1040ez form Taxable income limit. Filing 1040ez form   If you are an independent producer or royalty owner of oil and gas, your deduction for percentage depletion is limited to the smaller of the following. Filing 1040ez form 100% of your taxable income from the property figured without the deduction for depletion and the deduction for domestic production activities under section 199 of the Internal Revenue Code. Filing 1040ez form For a definition of taxable income from the property, see Taxable income limit , earlier, under Mineral Property. Filing 1040ez form 65% of your taxable income from all sources, figured without the depletion allowance, the deduction for domestic production activities, any net operating loss carryback, and any capital loss carryback. Filing 1040ez form You can carry over to the following year any amount you cannot deduct because of the 65%-of-taxable-income limit. Filing 1040ez form Add it to your depletion allowance (before applying any limits) for the following year. Filing 1040ez form Partnerships and S Corporations Generally, each partner or S corporation shareholder, and not the partnership or S corporation, figures the depletion allowance separately. Filing 1040ez form (However, see Electing large partnerships must figure depletion allowance , later. Filing 1040ez form ) Each partner or shareholder must decide whether to use cost or percentage depletion. Filing 1040ez form If a partner or shareholder uses percentage depletion, he or she must apply the 65%-of-taxable-income limit using his or her taxable income from all sources. Filing 1040ez form Partner's or shareholder's adjusted basis. Filing 1040ez form   The partnership or S corporation must allocate to each partner or shareholder his or her share of the adjusted basis of each oil or gas property held by the partnership or S corporation. Filing 1040ez form The partnership or S corporation makes the allocation as of the date it acquires the oil or gas property. Filing 1040ez form   Each partner's share of the adjusted basis of the oil or gas property generally is figured according to that partner's interest in partnership capital. Filing 1040ez form However, in some cases, it is figured according to the partner's interest in partnership income. Filing 1040ez form   The partnership or S corporation adjusts the partner's or shareholder's share of the adjusted basis of the oil and gas property for any capital expenditures made for the property and for any change in partnership or S corporation interests. Filing 1040ez form Recordkeeping. Filing 1040ez form Each partner or shareholder must separately keep records of his or her share of the adjusted basis in each oil and gas property of the partnership or S corporation. Filing 1040ez form The partner or shareholder must reduce his or her adjusted basis by the depletion allowed or allowable on the property each year. Filing 1040ez form The partner or shareholder must use that reduced adjusted basis to figure cost depletion or his or her gain or loss if the partnership or S corporation disposes of the property. Filing 1040ez form Reporting the deduction. Filing 1040ez form   Information that you, as a partner or shareholder, use to figure your depletion deduction on oil and gas properties is reported by the partnership or S corporation on Schedule K-1 (Form 1065) or on Schedule K-1 (Form 1120S). Filing 1040ez form Deduct oil and gas depletion for your partnership or S corporation interest on Schedule E (Form 1040). Filing 1040ez form The depletion deducted on Schedule E is included in figuring income or loss from rental real estate or royalty properties. Filing 1040ez form The instructions for Schedule E explain where to report this income or loss and whether you need to file either of the following forms. Filing 1040ez form Form 6198, At-Risk Limitations. Filing 1040ez form Form 8582, Passive Activity Loss Limitations. Filing 1040ez form Electing large partnerships must figure depletion allowance. Filing 1040ez form   An electing large partnership, rather than each partner, generally must figure the depletion allowance. Filing 1040ez form The partnership figures the depletion allowance without taking into account the 65-percent-of-taxable-income limit and the depletable oil or natural gas quantity. Filing 1040ez form Also, the adjusted basis of a partner's interest in the partnership is not affected by the depletion allowance. Filing 1040ez form   An electing large partnership is one that meets both the following requirements. Filing 1040ez form The partnership had 100 or more partners in the preceding year. Filing 1040ez form The partnership chooses to be an electing large partnership. Filing 1040ez form Disqualified persons. Filing 1040ez form   An electing large partnership does not figure the depletion allowance of its partners that are disqualified persons. Filing 1040ez form Disqualified persons must figure it themselves, as explained earlier. Filing 1040ez form   All the following are disqualified persons. Filing 1040ez form Refiners who cannot claim percentage depletion (discussed under Independent Producers and Royalty Owners , earlier). Filing 1040ez form Retailers who cannot claim percentage depletion (discussed under Independent Producers and Royalty Owners , earlier). Filing 1040ez form Any partner whose average daily production of domestic crude oil and natural gas is more than 500 barrels during the tax year in which the partnership tax year ends. Filing 1040ez form Average daily production is discussed earlier. Filing 1040ez form Natural Gas Wells You can use percentage depletion for a well that produces natural gas that is either Sold under a fixed contract, or Produced from geopressured brine. Filing 1040ez form Natural gas sold under a fixed contract. Filing 1040ez form   Natural gas sold under a fixed contract qualifies for a percentage depletion rate of 22%. Filing 1040ez form This is domestic natural gas sold by the producer under a contract that does not provide for a price increase to reflect any increase in the seller's tax liability because of the repeal of percentage depletion for gas. Filing 1040ez form The contract must have been in effect from February 1, 1975, until the date of sale of the gas. Filing 1040ez form Price increases after February 1, 1975, are presumed to take the increase in tax liability into account unless demonstrated otherwise by clear and convincing evidence. Filing 1040ez form Natural gas from geopressured brine. Filing 1040ez form   Qualified natural gas from geopressured brine is eligible for a percentage depletion rate of 10%. Filing 1040ez form This is natural gas that is both the following. Filing 1040ez form Produced from a well you began to drill after September 1978 and before 1984. Filing 1040ez form Determined in accordance with section 503 of the Natural Gas Policy Act of 1978 to be produced from geopressured brine. Filing 1040ez form Mines and Geothermal Deposits Certain mines, wells, and other natural deposits, including geothermal deposits, qualify for percentage depletion. Filing 1040ez form Mines and other natural deposits. Filing 1040ez form   For a natural deposit, the percentage of your gross income from the property that you can deduct as depletion depends on the type of deposit. Filing 1040ez form   The following is a list of the percentage depletion rates for the more common minerals. Filing 1040ez form DEPOSITS RATE Sulphur, uranium, and, if from deposits in the United States, asbestos, lead ore, zinc ore, nickel ore, and mica 22% Gold, silver, copper, iron ore, and certain oil shale, if from deposits in the United States 15% Borax, granite, limestone, marble, mollusk shells, potash, slate, soapstone, and carbon dioxide produced from a well 14% Coal, lignite, and sodium chloride 10% Clay and shale used or sold for use in making sewer pipe or bricks or used or sold for use as sintered or burned lightweight aggregates 7½% Clay used or sold for use in making drainage and roofing tile, flower pots, and kindred products, and gravel, sand, and stone (other than stone used or sold for use by a mine owner or operator as dimension or ornamental stone) 5%   You can find a complete list of minerals and their percentage depletion rates in section 613(b) of the Internal Revenue Code. Filing 1040ez form Corporate deduction for iron ore and coal. Filing 1040ez form   The percentage depletion deduction of a corporation for iron ore and coal (including lignite) is reduced by 20% of: The percentage depletion deduction for the tax year (figured without this reduction), minus The adjusted basis of the property at the close of the tax year (figured without the depletion deduction for the tax year). Filing 1040ez form Gross income from the property. Filing 1040ez form   For property other than a geothermal deposit or an oil or gas well, gross income from the property means the gross income from mining. Filing 1040ez form Mining includes all the following. Filing 1040ez form Extracting ores or minerals from the ground. Filing 1040ez form Applying certain treatment processes described later. Filing 1040ez form Transporting ores or minerals (generally, not more than 50 miles) from the point of extraction to the plants or mills in which the treatment processes are applied. Filing 1040ez form Excise tax. Filing 1040ez form   Gross income from mining includes the separately stated excise tax received by a mine operator from the sale of coal to compensate the operator for the excise tax the mine operator must pay to finance black lung benefits. Filing 1040ez form Extraction. Filing 1040ez form   Extracting ores or minerals from the ground includes extraction by mine owners or operators of ores or minerals from the waste or residue of prior mining. Filing 1040ez form This does not apply to extraction from waste or residue of prior mining by the purchaser of the waste or residue or the purchaser of the rights to extract ores or minerals from the waste or residue. Filing 1040ez form Treatment processes. Filing 1040ez form   The processes included as mining depend on the ore or mineral mined. Filing 1040ez form To qualify as mining, the treatment processes must be applied by the mine owner or operator. Filing 1040ez form For a listing of treatment processes considered as mining, see section 613(c)(4) of the Internal Revenue Code and the related regulations. Filing 1040ez form Transportation of more than 50 miles. Filing 1040ez form   If the IRS finds that the ore or mineral must be transported more than 50 miles to plants or mills to be treated because of physical and other requirements, the additional authorized transportation is considered mining and included in the computation of gross income from mining. Filing 1040ez form    If you wish to include transportation of more than 50 miles in the computation of gross income from mining, request an advance ruling from the IRS. Filing 1040ez form Include in the request the facts about the physical and other requirements that prevented the construction and operation of the plant within 50 miles of the point of extraction. Filing 1040ez form For more information about requesting an advance ruling, see Revenue Procedure 2013-1, available at www. Filing 1040ez form irs. Filing 1040ez form gov/irb/2013-01_IRB/ar11. Filing 1040ez form html. Filing 1040ez form Disposal of coal or iron ore. Filing 1040ez form   You cannot take a depletion deduction for coal (including lignite) or iron ore mined in the United States if both the following apply. Filing 1040ez form You disposed of it after holding it for more than 1 year. Filing 1040ez form You disposed of it under a contract under which you retain an economic interest in the coal or iron ore. Filing 1040ez form Treat any gain on the disposition as a capital gain. Filing 1040ez form Disposal to related person. Filing 1040ez form   This rule does not apply if you dispose of the coal or iron ore to one of the following persons. Filing 1040ez form A related person (as listed in chapter 2 of Publication 544). Filing 1040ez form A person owned or controlled by the same interests that own or control you. Filing 1040ez form Geothermal deposits. Filing 1040ez form   Geothermal deposits located in the United States or its possessions qualify for a percentage depletion rate of 15%. Filing 1040ez form A geothermal deposit is a geothermal reservoir of natural heat stored in rocks or in a watery liquid or vapor. Filing 1040ez form For percentage depletion purposes, a geothermal deposit is not considered a gas well. Filing 1040ez form   Figure gross income from the property for a geothermal steam well in the same way as for oil and gas wells. Filing 1040ez form See Gross income from the property , earlier, under Oil and Gas Wells. Filing 1040ez form Percentage depletion on a geothermal deposit cannot be more than 50% of your taxable income from the property. Filing 1040ez form Lessor's Gross Income In the case of leased property, the depletion deduction is divided between the lessor and the lessee. Filing 1040ez form A lessor's gross income from the property that qualifies for percentage depletion usually is the total of the royalties received from the lease. Filing 1040ez form Bonuses and advanced royalties. Filing 1040ez form   Bonuses and advanced royalties are payments a lessee makes before production to a lessor for the grant of rights in a lease or for minerals, gas, or oil to be extracted from leased property. Filing 1040ez form If you are the lessor, your income from bonuses and advanced royalties received is subject to an allowance for depletion, as explained in the next two paragraphs. Filing 1040ez form Figuring cost depletion. Filing 1040ez form   To figure cost depletion on a bonus, multiply your adjusted basis in the property by a fraction, the numerator of which is the bonus and the denominator of which is the total bonus and royalties expected to be received. Filing 1040ez form To figure cost depletion on advanced royalties, use the computation explained earlier under Cost Depletion , treating the number of units for which the advanced royalty is received as the number of units sold. Filing 1040ez form Figuring percentage depletion. Filing 1040ez form   In the case of mines, wells, and other natural deposits other than gas, oil, or geothermal property, you may use the percentage rates discussed earlier under Mines and Geothermal Deposits . Filing 1040ez form Any bonus or advanced royalty payments are generally part of the gross income from the property to which the rates are applied in making the calculation. Filing 1040ez form However, for oil, gas, or geothermal property, gross income does not include lease bonuses, advanced royalties, or other amounts payable without regard to production from the property. Filing 1040ez form Ending the lease. Filing 1040ez form   If you receive a bonus on a lease that ends or is abandoned before you derive any income from mineral extraction, include in income the depletion deduction you took. Filing 1040ez form Do this for the year the lease ends or is abandoned. Filing 1040ez form Also increase your adjusted basis in the property to restore the depletion deduction you previously subtracted. Filing 1040ez form   For advanced royalties, include in income the depletion claimed on minerals for which the advanced royalties were paid if the minerals were not produced before the lease ended. Filing 1040ez form Include this amount in income for the year the lease ends. Filing 1040ez form Increase your adjusted basis in the property by the amount you include in income. Filing 1040ez form Delay rentals. Filing 1040ez form   These are payments for deferring development of the property. Filing 1040ez form Since delay rentals are ordinary rent, they are ordinary income that is not subject to depletion. Filing 1040ez form These rentals can be avoided by either abandoning the lease, beginning development operations, or obtaining production. Filing 1040ez form Timber You can figure timber depletion only by the cost method. Filing 1040ez form Percentage depletion does not apply to timber. Filing 1040ez form Base your depletion on your cost or other basis in the timber. Filing 1040ez form Your cost does not include the cost of land or any amounts recoverable through depreciation. Filing 1040ez form Depletion takes place when you cut standing timber. Filing 1040ez form You can figure your depletion deduction when the quantity of cut timber is first accurately measured in the process of exploitation. Filing 1040ez form Figuring cost depletion. Filing 1040ez form   To figure your cost depletion allowance, you multiply the number of timber units cut by your depletion unit. Filing 1040ez form Timber units. Filing 1040ez form   When you acquire timber property, you must make an estimate of the quantity of marketable timber that exists on the property. Filing 1040ez form You measure the timber using board feet, log scale, cords, or other units. Filing 1040ez form If you later determine that you have more or less units of timber, you must adjust the original estimate. Filing 1040ez form   The term “timber property” means your economic interest in standing timber in each tract or block representing a separate timber account. Filing 1040ez form Depletion unit. Filing 1040ez form   You figure your depletion unit each year by taking the following steps. Filing 1040ez form Determine your cost or adjusted basis of the timber on hand at the beginning of the year. Filing 1040ez form Adjusted basis is defined under Cost Depletion in the discussion on Mineral Property. Filing 1040ez form Add to the amount determined in (1) the cost of any timber units acquired during the year and any additions to capital. Filing 1040ez form Figure the number of timber units to take into account by adding the number of timber units acquired during the year to the number of timber units on hand in the account at the beginning of the year and then adding (or subtracting) any correction to the estimate of the number of timber units remaining in the account. Filing 1040ez form Divide the result of (2) by the result of (3). Filing 1040ez form This is your depletion unit. Filing 1040ez form Example. Filing 1040ez form You bought a timber tract for $160,000 and the land was worth as much as the timber. Filing 1040ez form Your basis for the timber is $80,000. Filing 1040ez form Based on an estimated one million board feet (1,000 MBF) of standing timber, you figure your depletion unit to be $80 per MBF ($80,000 ÷ 1,000). Filing 1040ez form If you cut 500 MBF of timber, your depletion allowance would be $40,000 (500 MBF × $80). Filing 1040ez form When to claim depletion. Filing 1040ez form   Claim your depletion allowance as a deduction in the year of sale or other disposition of the products cut from the timber, unless you choose to treat the cutting of timber as a sale or exchange (explained below). Filing 1040ez form Include allowable depletion for timber products not sold during the tax year the timber is cut as a cost item in the closing inventory of timber products for the year. Filing 1040ez form The inventory is your basis for determining gain or loss in the tax year you sell the timber products. Filing 1040ez form Example. Filing 1040ez form The facts are the same as in the previous example except that you sold only half of the timber products in the cutting year. Filing 1040ez form You would deduct $20,000 of the $40,000 depletion that year. Filing 1040ez form You would add the remaining $20,000 depletion to your closing inventory of timber products. Filing 1040ez form Electing to treat the cutting of timber as a sale or exchange. Filing 1040ez form   You can elect, under certain circumstances, to treat the cutting of timber held for more than 1 year as a sale or exchange. Filing 1040ez form You must make the election on your income tax return for the tax year to which it applies. Filing 1040ez form If you make this election, subtract the adjusted basis for depletion from the fair market value of the timber on the first day of the tax year in which you cut it to figure the gain or loss on the cutting. Filing 1040ez form You generally report the gain as long-term capital gain. Filing 1040ez form The fair market value then becomes your basis for figuring your ordinary gain or loss on the sale or other disposition of the products cut from the timber. Filing 1040ez form For more information, see Timber in chapter 2 of Publication 544, Sales and Other Dispositions of Assets. Filing 1040ez form   You may revoke an election to treat the cutting of timber as a sale or exchange without IRS's consent. Filing 1040ez form The prior election (and revocation) is disregarded for purposes of making a subsequent election. Filing 1040ez form See Form T (Timber), Forest Activities Schedule, for more information. Filing 1040ez form Form T. Filing 1040ez form   Complete and attach Form T (Timber) to your income tax return if you claim a deduction for timber depletion, choose to treat the cutting of timber as a sale or exchange, or make an outright sale of timber. Filing 1040ez form Prev  Up  Next   Home   More Online Publications
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Se Pudiera Estar Terminando el Plazo – Marzo 31 Es Una Fecha Importante

Consideraciones de La Ley del Cuidado de Salud para 2014

 

HC-TT-2014-11SP

Para la mayoría de personas, la Ley de Cuidado de Salud a Bajo Precio no afecta las declaraciones de impuestos por ingresos de 2013 que están presentando en 2014. Sin embargo, algunas personas pudieran tener que tomar decisiones importantes para el 31 de marzo de 2014, la fecha límite para la matrícula abierta. 

A continuación hay cinco cosas acerca de la ley del cuidado de salud que usted pudiera tener que tomar en consideración pronto.

  •  Asegurado Actualmente – Sin Cambio: Si usted está asegurado actualmente no necesita hacer nada más que seguir con su seguro.

  • No Está Asegurado – Regístrese para el 31 de Marzo: El periodo de matricula abierta para comprar cobertura de seguro médico a través del Mercado de Seguros de Salud para 2014 continua hasta el 31 de marzo de 2014. Cuando usted obtiene seguro médico a través del mercado, usted pudiera tener disponibles pagos adelantados del crédito tributario de primas que le ayudarán a reducir de inmediato sus primas mensuales. Infórmese en CuidadoDeSalud.gov.

  • Crédito Tributario de Primas para Reducir Su Prima Mensual: Si usted obtiene seguro a través del Mercado, usted pudiera ser elegible para reclamar el crédito tributario de primas. Usted puede elegir que pagos adelantados del crédito tributario sean enviados directamente a su asegurador durante el 2014, o esperar a reclamar el crédito al presentar su declaración de impuestos en el 2015. Si usted elije que se envíen pagos adelantados a su asegurador, usted tendrá que reconciliar los pagos en su declaración de impuestos de 2014, la cual será presentada en 2015. Si usted ya está recibiendo pagos adelantados del crédito, no tendrá que hacer nada por el momento a menos que haya un cambio en sus circunstancias. Obtenga más información.

  • Cambio de Circunstancias: Si está recibiendo pagos adelantados del crédito tributario de primas para ayudarle a pagar por su cobertura de seguro médico, usted debería reportar los cambios en su vida, tales como cambios en sus ingresos, estado civil o en el tamaño de su familia, al Mercado. Reportar los cambios le ayudará a cerciorarse de que está recibiendo la cantidad adecuada en pagos por adelantado del crédito tributario de primas.

  • Pagos de Responsabilidad Compartida para Individuos: A partir de enero de 2014, usted y su familia han tenido el requisito de tener cobertura de seguro médico o tener una exención de cobertura.  La mayoría de personas ya tiene cobertura de seguro médico calificada. Estas personas no tendrán que hacer nada más que mantener esa cobertura a lo largo de 2014. Si usted puede costear cobertura pero decide no comprarla y permanecer sin seguro, usted podría tener que efectuar un pago de responsabilidad compartida para personas físicas al presentar su declaración de impuestos en el 2015. Obtenga más información.

 

Información Adicional

Infórmese sobre las disposiciones tributarias de la ley del cuidado de salud en IRS.gov/aca (español). 

Infórmese sobre el Mercado de Seguros de Salud en CuidadoDeSalud.gov.

Para recibir por email copias de los consejos tributarios del IRS en inglés, suscríbase en www.irs.gov/uac/Subscribe-to-IRS-Tax-Tips. Para los consejos tributarios del IRS en español visite IRS.gov.

 

Page Last Reviewed or Updated: 24-Mar-2014

The Filing 1040ez Form

Filing 1040ez form Publication 15-T - Additional Material Table of Contents This image is too large to be displayed in the current screen. Filing 1040ez form Please click the link to view the image. Filing 1040ez form Form W-4 (2009) This image is too large to be displayed in the current screen. Filing 1040ez form Please click the link to view the image. Filing 1040ez form Deductions and Adjustments Worksheet Notice to Employees Please click here for the text description of the image. Filing 1040ez form Multi-Media/Back Page Prev  Up  Next   Home   More Online Publications