Mineral gas lease


J

jocelyn.helent

I received a check in 2008 as a bonus for the lease I signed with a
gas company in 2007. They sent me a 1099-MISC, where they reported the
payment as a rent.

How do I include this payment in the Schedule E?
Is there any expenses that I can recognize to reduce this income?
Please advise.
Jocelyn
 
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F

Frank S. Duke, Jr.

(e-mail address removed),
(e-mail address removed) at (e-mail address removed) wrote on 3/12/09 9:32
PM:
I received a check in 2008 as a bonus for the lease I signed with a
gas company in 2007. They sent me a 1099-MISC, where they reported the
payment as a rent.

How do I include this payment in the Schedule E?
Is there any expenses that I can recognize to reduce this income?
Please advise.
Jocelyn
I had one of these in the state of PA this year. Just show the 1099MISC as
rent on the Schedule E. If you are using tax software, when you enter the
1099MISC, it will ask you what you want to hook it up to and you pick your
schedule E. We deducted RE tax, legal fees, fees for maintaining the
property, etc. We also had to file a PA non-resident return because my
client lived in TN.

Uncompensated advice guaranteed correct or double your money back

Frank S. Duke, Jr. CPA
Cincinnati, OH USA
 
H

Harlan Lunsford

I received a check in 2008 as a bonus for the lease I signed with a
gas company in 2007. They sent me a 1099-MISC, where they reported the
payment as a rent.

How do I include this payment in the Schedule E?
Is there any expenses that I can recognize to reduce this income?
Please advise.
Jocelyn
hmmm,... maybe depletion allowance? Is there a percentage for natural gas?

Certainly taxes on the land.

ChEAr$,
Harlan Lunsford, EA n LA
 
D

D. Stussy

I received a check in 2008 as a bonus for the lease I signed with a
gas company in 2007. They sent me a 1099-MISC, where they reported the
payment as a rent.

How do I include this payment in the Schedule E?
You don't. Working interests in oil and gas go on schedule C.
Is there any expenses that I can recognize to reduce this income?
Only if you incurred the expenses.
 
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M

Mark Bole

D. Stussy said:
You don't. Working interests in oil and gas go on schedule C.
True, but then it should have been reported in 1099-MISC Box 7, not as a
rent.
Only if you incurred the expenses.
To follow on Harlan's comment, a working gas or oil interest reportable
on Schedule C will normally have a depletion expense in addition to
other expenses.

-Mark Bole
 

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