Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

Back Tax Filing

Turbotax 2012 ReturnForm1040ezIrs Amended Return FormTax Act Online 2011Nj 1040nrHow To Complete A 1040x1040ez Form For 2014Freetax UsaSearch FreetaxusaHow To File A Amended Tax Return For 2011Where Can Ie File My State Taxes For FreeNeed To File A 2011 Tax Return2012 TaxesH&r Block Free FileFederal Tax Forms 2012I Need To Efile My 2011 Taxes1040x Form 2011 TurbotaxFree Filing For 2012 Taxes1040 Tax FormTax Returns For StudentsIrs 1040x InstructionsAmending A Tax Return OnlineH&r Block Free Tax Prep2012 Tax PreparationFile An Amended Tax Return OnlineAmended Tax ReturnsWhere Can I File My State Taxes Online1040x TurbotaxHow To File 2007 Taxes Online Free2013 Amended 1040Filing A Tax AmendmentIllinois 1040ezFederal Tax Forms 2009Free Tax AmendmentFile State Taxes For Free2012 Tax ReturnsFreefillableformsFree Online State Tax FilingEz 1040How To File An Amendment For Taxes

Back Tax Filing

Back tax filing 9. Back tax filing   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. Back tax filing Depletion unit. Back tax filing Introduction Depletion is the using up of natural resources by mining, drilling, quarrying stone, or cutting timber. Back tax filing The depletion deduction allows an owner or operator to account for the reduction of a product's reserves. Back tax filing There are two ways of figuring depletion: cost depletion and percentage depletion. Back tax filing For mineral property, you generally must use the method that gives you the larger deduction. Back tax filing For standing timber, you must use cost depletion. Back tax filing 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. Back tax filing More than one person can have an economic interest in the same mineral deposit or timber. Back tax filing In the case of leased property, the depletion deduction is divided between the lessor and the lessee. Back tax filing You have an economic interest if both the following apply. Back tax filing You have acquired by investment any interest in mineral deposits or standing timber. Back tax filing 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. Back tax filing 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. Back tax filing A production payment carved out of, or retained on the sale of, mineral property is not an economic interest. Back tax filing Individuals, corporations, estates, and trusts who claim depletion deductions may be liable for alternative minimum tax. Back tax filing Basis adjustment for depletion. Back tax filing   You must reduce the basis of your property by the depletion allowed or allowable, whichever is greater. Back tax filing Mineral Property Mineral property includes oil and gas wells, mines, and other natural deposits (including geothermal deposits). Back tax filing For this purpose, the term “property” means each separate interest you own in each mineral deposit in each separate tract or parcel of land. Back tax filing You can treat two or more separate interests as one property or as separate properties. Back tax filing See section 614 of the Internal Revenue Code and the related regulations for rules on how to treat separate mineral interests. Back tax filing There are two ways of figuring depletion on mineral property. Back tax filing Cost depletion. Back tax filing Percentage depletion. Back tax filing Generally, you must use the method that gives you the larger deduction. Back tax filing However, unless you are an independent producer or royalty owner, you generally cannot use percentage depletion for oil and gas wells. Back tax filing See Oil and Gas Wells , later. Back tax filing Cost Depletion To figure cost depletion you must first determine the following. Back tax filing The property's basis for depletion. Back tax filing The total recoverable units of mineral in the property's natural deposit. Back tax filing The number of units of mineral sold during the tax year. Back tax filing Basis for depletion. Back tax filing   To figure the property's basis for depletion, subtract all the following from the property's adjusted basis. Back tax filing Amounts recoverable through: Depreciation deductions, Deferred expenses (including deferred exploration and development costs), and Deductions other than depletion. Back tax filing The residual value of land and improvements at the end of operations. Back tax filing The cost or value of land acquired for purposes other than mineral production. Back tax filing Adjusted basis. Back tax filing   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. Back tax filing Your adjusted basis can never be less than zero. Back tax filing See Publication 551, Basis of Assets, for more information on adjusted basis. Back tax filing Total recoverable units. Back tax filing   The total recoverable units is the sum of the following. Back tax filing The number of units of mineral remaining at the end of the year (including units recovered but not sold). Back tax filing The number of units of mineral sold during the tax year (determined under your method of accounting, as explained next). Back tax filing   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. Back tax filing You must include ores and minerals that are developed, in sight, blocked out, or assured. Back tax filing You must also include probable or prospective ores or minerals that are believed to exist based on good evidence. Back tax filing But see Elective safe harbor for owners of oil and gas property , later. Back tax filing Number of units sold. Back tax filing   You determine the number of units sold during the tax year based on your method of accounting. Back tax filing Use the following table to make this determination. Back tax filing    IF you  use . Back tax filing . Back tax filing . Back tax filing THEN the units sold during the year are . Back tax filing . Back tax filing . Back tax filing The cash method of accounting The units sold for which you receive payment during the tax year (regardless of the year of sale). Back tax filing An accrual method of accounting The units sold based on your inventories and method of accounting for inventory. Back tax filing   The number of units sold during the tax year does not include any for which depletion deductions were allowed or allowable in earlier years. Back tax filing Figuring the cost depletion deduction. Back tax filing   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. Back tax filing Step Action Result 1 Divide your property's basis for depletion by total recoverable units. Back tax filing Rate per unit. Back tax filing 2 Multiply the rate per unit by units sold during the tax year. Back tax filing Cost depletion deduction. Back tax filing You must keep accounts for the depletion of each property and adjust these accounts each year for units sold and depletion claimed. Back tax filing Elective safe harbor for owners of oil and gas property. Back tax filing   Instead of using the method described earlier to determine the total recoverable units, you can use an elective safe harbor. Back tax filing If you choose the elective safe harbor, the total recoverable units equal 105% of a property's proven reserves (both developed and undeveloped). Back tax filing For details, see Revenue Procedure 2004-19 on page 563 of Internal Revenue Bulletin 2004-10, available at www. Back tax filing irs. Back tax filing gov/pub/irs-irbs/irb04-10. Back tax filing pdf. Back tax filing   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. Back tax filing The statement must indicate that you are electing the safe harbor provided by Revenue Procedure 2004-19. Back tax filing The election, if made, is effective for the tax year in which it is made and all later years. Back tax filing It cannot be revoked for the tax year in which it is elected, but may be revoked in a later year. Back tax filing Once revoked, it cannot be re-elected for the next 5 years. Back tax filing 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. Back tax filing 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 . Back tax filing Rates and other rules for percentage depletion of other specific minerals are found later in Mines and Geothermal Deposits . Back tax filing Gross income. Back tax filing   When figuring percentage depletion, subtract from your gross income from the property the following amounts. Back tax filing Any rents or royalties you paid or incurred for the property. Back tax filing 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. Back tax filing A bonus payment includes amounts you paid as a lessee to satisfy a production payment retained by the lessor. Back tax filing   Use the following fraction to figure the part of the bonus you must subtract. Back tax filing No. Back tax filing 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. Back tax filing For other property, more information about the definition of gross income from the property is under Mines and Geothermal Deposits , later. Back tax filing Taxable income limit. Back tax filing   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. Back tax filing   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. Back tax filing These deductible items include, but are not limited to, the following. Back tax filing Operating expenses. Back tax filing Certain selling expenses. Back tax filing Administrative and financial overhead. Back tax filing Depreciation. Back tax filing Intangible drilling and development costs. Back tax filing Exploration and development expenditures. Back tax filing Deductible taxes (see chapter 5), but not taxes that you capitalize or take as a credit. Back tax filing Losses sustained. Back tax filing   The following rules apply when figuring your taxable income from the property for purposes of the taxable income limit. Back tax filing Do not deduct any net operating loss deduction from the gross income from the property. Back tax filing Corporations do not deduct charitable contributions from the gross income from the property. Back tax filing 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. Back tax filing See section 1. Back tax filing 613-5(b)(1) of the regulations for information on how to figure the ordinary gain allocable to the property. Back tax filing Oil and Gas Wells You cannot claim percentage depletion for an oil or gas well unless at least one of the following applies. Back tax filing You are either an independent producer or a royalty owner. Back tax filing The well produces natural gas that is either sold under a fixed contract or produced from geopressured brine. Back tax filing If you are an independent producer or royalty owner, see Independent Producers and Royalty Owners , next. Back tax filing 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. Back tax filing 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. Back tax filing However, certain refiners, as explained next, and certain retailers and transferees of proven oil and gas properties, as explained next, cannot claim percentage depletion. Back tax filing For information on figuring the deduction, see Figuring percentage depletion , later. Back tax filing Refiners who cannot claim percentage depletion. Back tax filing   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. Back tax filing 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. Back tax filing Related person. Back tax filing   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. Back tax filing For example, a corporation, partnership, estate, or trust and anyone who holds a significant ownership interest in it are related persons. Back tax filing A partnership and a trust are related persons if one person holds a significant ownership interest in each of them. Back tax filing 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. Back tax filing The value of the outstanding stock of a corporation. Back tax filing The interest in the profits or capital of a partnership. Back tax filing The beneficial interests in an estate or trust. Back tax filing 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. Back tax filing Retailers who cannot claim percentage depletion. Back tax filing   You cannot claim percentage depletion if both the following apply. Back tax filing You sell oil or natural gas or their by-products directly or through a related person in any of the following situations. Back tax filing Through a retail outlet operated by you or a related person. Back tax filing 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. Back tax filing 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. Back tax filing 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. Back tax filing   For the purpose of determining if this rule applies, do not count the following. Back tax filing Bulk sales (sales in very large quantities) of oil or natural gas to commercial or industrial users. Back tax filing Bulk sales of aviation fuels to the Department of Defense. Back tax filing 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. Back tax filing Related person. Back tax filing   To determine if you and another person are related persons, see Related person under Refiners who cannot claim percentage depletion, earlier. Back tax filing Sales through a related person. Back tax filing   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. Back tax filing   You are not considered to be selling through a related person who is a retailer if all the following apply. Back tax filing You do not have a significant ownership interest in the retailer. Back tax filing You sell your production to persons who are not related to either you or the retailer. Back tax filing The retailer does not buy oil or natural gas from your customers or persons related to your customers. Back tax filing 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. Back tax filing 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. Back tax filing Transferees who cannot claim percentage depletion. Back tax filing   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. Back tax filing For a definition of the term “transfer,” see section 1. Back tax filing 613A-7(n) of the regulations. Back tax filing For a definition of the term “interest in proven oil or gas property,” see section 1. Back tax filing 613A-7(p) of the regulations. Back tax filing Figuring percentage depletion. Back tax filing   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. Back tax filing 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%. Back tax filing 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. Back tax filing   In addition, there is a limit on the percentage depletion deduction. Back tax filing See Taxable income limit , later. Back tax filing Average daily production. Back tax filing   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. Back tax filing Partial interest. Back tax filing   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. Back tax filing   You have a partial interest in the production from a property if you have a net profits interest in the property. Back tax filing 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. Back tax filing To figure this percentage, you divide the income you receive for your net profits interest by the gross revenue from the property. Back tax filing Then multiply the total production from the property by your percentage participation to figure your share of the production. Back tax filing Example. Back tax filing Javier Robles owns oil property in which Pablo Olmos owns a 20% net profits interest. Back tax filing During the year, the property produced 10,000 barrels of oil, which Javier sold for $200,000. Back tax filing Javier had expenses of $90,000 attributable to the property. Back tax filing The property generated a net profit of $110,000 ($200,000 − $90,000). Back tax filing Pablo received income of $22,000 ($110,000 × . Back tax filing 20) for his net profits interest. Back tax filing 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). Back tax filing Pablo determined his share of the oil production to be 1,100 barrels (10,000 barrels × 11%). Back tax filing Depletable oil or natural gas quantity. Back tax filing   Generally, your depletable oil quantity is 1,000 barrels. Back tax filing 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. Back tax filing 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. Back tax filing Example. Back tax filing You have both oil and natural gas production. Back tax filing To figure your depletable natural gas quantity, you choose to apply 360 barrels of your 1000-barrel depletable oil quantity. Back tax filing Your depletable natural gas quantity is 2. Back tax filing 16 million cubic feet of gas (360 × 6000). Back tax filing You must reduce your depletable oil quantity to 640 barrels (1000 − 360). Back tax filing 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. Back tax filing Also, see Notice 2012-50, available at www. Back tax filing irs. Back tax filing gov/irb/2012–31_IRB/index. Back tax filing html. Back tax filing Business entities and family members. Back tax filing   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. Back tax filing 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). Back tax filing You and your spouse and minor children. Back tax filing 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. Back tax filing Controlled group of corporations. Back tax filing   Members of the same controlled group of corporations are treated as one taxpayer when figuring the depletable oil or natural gas quantity. Back tax filing They share the depletable quantity. Back tax filing 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%. Back tax filing ” Gross income from the property. Back tax filing   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. Back tax filing 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. Back tax filing   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. Back tax filing   Gross income from the property does not include lease bonuses, advance royalties, or other amounts payable without regard to production from the property. Back tax filing Average daily production exceeds depletable quantities. Back tax filing   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. Back tax filing Figure your average daily production of oil or natural gas for the year. Back tax filing Figure your depletable oil or natural gas quantity for the year. Back tax filing Figure depletion for all oil or natural gas produced from the property using a percentage depletion rate of 15%. Back tax filing 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). Back tax filing This is your depletion allowance for that property for the year. Back tax filing Taxable income limit. Back tax filing   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. Back tax filing 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. Back tax filing For a definition of taxable income from the property, see Taxable income limit , earlier, under Mineral Property. Back tax filing 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. Back tax filing You can carry over to the following year any amount you cannot deduct because of the 65%-of-taxable-income limit. Back tax filing Add it to your depletion allowance (before applying any limits) for the following year. Back tax filing Partnerships and S Corporations Generally, each partner or S corporation shareholder, and not the partnership or S corporation, figures the depletion allowance separately. Back tax filing (However, see Electing large partnerships must figure depletion allowance , later. Back tax filing ) Each partner or shareholder must decide whether to use cost or percentage depletion. Back tax filing 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. Back tax filing Partner's or shareholder's adjusted basis. Back tax filing   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. Back tax filing The partnership or S corporation makes the allocation as of the date it acquires the oil or gas property. Back tax filing   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. Back tax filing However, in some cases, it is figured according to the partner's interest in partnership income. Back tax filing   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. Back tax filing Recordkeeping. Back tax filing 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. Back tax filing The partner or shareholder must reduce his or her adjusted basis by the depletion allowed or allowable on the property each year. Back tax filing 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. Back tax filing Reporting the deduction. Back tax filing   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). Back tax filing Deduct oil and gas depletion for your partnership or S corporation interest on Schedule E (Form 1040). Back tax filing The depletion deducted on Schedule E is included in figuring income or loss from rental real estate or royalty properties. Back tax filing The instructions for Schedule E explain where to report this income or loss and whether you need to file either of the following forms. Back tax filing Form 6198, At-Risk Limitations. Back tax filing Form 8582, Passive Activity Loss Limitations. Back tax filing Electing large partnerships must figure depletion allowance. Back tax filing   An electing large partnership, rather than each partner, generally must figure the depletion allowance. Back tax filing 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. Back tax filing Also, the adjusted basis of a partner's interest in the partnership is not affected by the depletion allowance. Back tax filing   An electing large partnership is one that meets both the following requirements. Back tax filing The partnership had 100 or more partners in the preceding year. Back tax filing The partnership chooses to be an electing large partnership. Back tax filing Disqualified persons. Back tax filing   An electing large partnership does not figure the depletion allowance of its partners that are disqualified persons. Back tax filing Disqualified persons must figure it themselves, as explained earlier. Back tax filing   All the following are disqualified persons. Back tax filing Refiners who cannot claim percentage depletion (discussed under Independent Producers and Royalty Owners , earlier). Back tax filing Retailers who cannot claim percentage depletion (discussed under Independent Producers and Royalty Owners , earlier). Back tax filing 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. Back tax filing Average daily production is discussed earlier. Back tax filing 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. Back tax filing Natural gas sold under a fixed contract. Back tax filing   Natural gas sold under a fixed contract qualifies for a percentage depletion rate of 22%. Back tax filing 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. Back tax filing The contract must have been in effect from February 1, 1975, until the date of sale of the gas. Back tax filing 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. Back tax filing Natural gas from geopressured brine. Back tax filing   Qualified natural gas from geopressured brine is eligible for a percentage depletion rate of 10%. Back tax filing This is natural gas that is both the following. Back tax filing Produced from a well you began to drill after September 1978 and before 1984. Back tax filing Determined in accordance with section 503 of the Natural Gas Policy Act of 1978 to be produced from geopressured brine. Back tax filing Mines and Geothermal Deposits Certain mines, wells, and other natural deposits, including geothermal deposits, qualify for percentage depletion. Back tax filing Mines and other natural deposits. Back tax filing   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. Back tax filing   The following is a list of the percentage depletion rates for the more common minerals. Back tax filing 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. Back tax filing Corporate deduction for iron ore and coal. Back tax filing   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). Back tax filing Gross income from the property. Back tax filing   For property other than a geothermal deposit or an oil or gas well, gross income from the property means the gross income from mining. Back tax filing Mining includes all the following. Back tax filing Extracting ores or minerals from the ground. Back tax filing Applying certain treatment processes described later. Back tax filing 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. Back tax filing Excise tax. Back tax filing   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. Back tax filing Extraction. Back tax filing   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. Back tax filing 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. Back tax filing Treatment processes. Back tax filing   The processes included as mining depend on the ore or mineral mined. Back tax filing To qualify as mining, the treatment processes must be applied by the mine owner or operator. Back tax filing For a listing of treatment processes considered as mining, see section 613(c)(4) of the Internal Revenue Code and the related regulations. Back tax filing Transportation of more than 50 miles. Back tax filing   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. Back tax filing    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. Back tax filing 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. Back tax filing For more information about requesting an advance ruling, see Revenue Procedure 2013-1, available at www. Back tax filing irs. Back tax filing gov/irb/2013-01_IRB/ar11. Back tax filing html. Back tax filing Disposal of coal or iron ore. Back tax filing   You cannot take a depletion deduction for coal (including lignite) or iron ore mined in the United States if both the following apply. Back tax filing You disposed of it after holding it for more than 1 year. Back tax filing You disposed of it under a contract under which you retain an economic interest in the coal or iron ore. Back tax filing Treat any gain on the disposition as a capital gain. Back tax filing Disposal to related person. Back tax filing   This rule does not apply if you dispose of the coal or iron ore to one of the following persons. Back tax filing A related person (as listed in chapter 2 of Publication 544). Back tax filing A person owned or controlled by the same interests that own or control you. Back tax filing Geothermal deposits. Back tax filing   Geothermal deposits located in the United States or its possessions qualify for a percentage depletion rate of 15%. Back tax filing A geothermal deposit is a geothermal reservoir of natural heat stored in rocks or in a watery liquid or vapor. Back tax filing For percentage depletion purposes, a geothermal deposit is not considered a gas well. Back tax filing   Figure gross income from the property for a geothermal steam well in the same way as for oil and gas wells. Back tax filing See Gross income from the property , earlier, under Oil and Gas Wells. Back tax filing Percentage depletion on a geothermal deposit cannot be more than 50% of your taxable income from the property. Back tax filing Lessor's Gross Income In the case of leased property, the depletion deduction is divided between the lessor and the lessee. Back tax filing A lessor's gross income from the property that qualifies for percentage depletion usually is the total of the royalties received from the lease. Back tax filing Bonuses and advanced royalties. Back tax filing   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. Back tax filing 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. Back tax filing Figuring cost depletion. Back tax filing   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. Back tax filing 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. Back tax filing Figuring percentage depletion. Back tax filing   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 . Back tax filing 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. Back tax filing 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. Back tax filing Ending the lease. Back tax filing   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. Back tax filing Do this for the year the lease ends or is abandoned. Back tax filing Also increase your adjusted basis in the property to restore the depletion deduction you previously subtracted. Back tax filing   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. Back tax filing Include this amount in income for the year the lease ends. Back tax filing Increase your adjusted basis in the property by the amount you include in income. Back tax filing Delay rentals. Back tax filing   These are payments for deferring development of the property. Back tax filing Since delay rentals are ordinary rent, they are ordinary income that is not subject to depletion. Back tax filing These rentals can be avoided by either abandoning the lease, beginning development operations, or obtaining production. Back tax filing Timber You can figure timber depletion only by the cost method. Back tax filing Percentage depletion does not apply to timber. Back tax filing Base your depletion on your cost or other basis in the timber. Back tax filing Your cost does not include the cost of land or any amounts recoverable through depreciation. Back tax filing Depletion takes place when you cut standing timber. Back tax filing You can figure your depletion deduction when the quantity of cut timber is first accurately measured in the process of exploitation. Back tax filing Figuring cost depletion. Back tax filing   To figure your cost depletion allowance, you multiply the number of timber units cut by your depletion unit. Back tax filing Timber units. Back tax filing   When you acquire timber property, you must make an estimate of the quantity of marketable timber that exists on the property. Back tax filing You measure the timber using board feet, log scale, cords, or other units. Back tax filing If you later determine that you have more or less units of timber, you must adjust the original estimate. Back tax filing   The term “timber property” means your economic interest in standing timber in each tract or block representing a separate timber account. Back tax filing Depletion unit. Back tax filing   You figure your depletion unit each year by taking the following steps. Back tax filing Determine your cost or adjusted basis of the timber on hand at the beginning of the year. Back tax filing Adjusted basis is defined under Cost Depletion in the discussion on Mineral Property. Back tax filing Add to the amount determined in (1) the cost of any timber units acquired during the year and any additions to capital. Back tax filing 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. Back tax filing Divide the result of (2) by the result of (3). Back tax filing This is your depletion unit. Back tax filing Example. Back tax filing You bought a timber tract for $160,000 and the land was worth as much as the timber. Back tax filing Your basis for the timber is $80,000. Back tax filing 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). Back tax filing If you cut 500 MBF of timber, your depletion allowance would be $40,000 (500 MBF × $80). Back tax filing When to claim depletion. Back tax filing   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). Back tax filing 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. Back tax filing The inventory is your basis for determining gain or loss in the tax year you sell the timber products. Back tax filing Example. Back tax filing The facts are the same as in the previous example except that you sold only half of the timber products in the cutting year. Back tax filing You would deduct $20,000 of the $40,000 depletion that year. Back tax filing You would add the remaining $20,000 depletion to your closing inventory of timber products. Back tax filing Electing to treat the cutting of timber as a sale or exchange. Back tax filing   You can elect, under certain circumstances, to treat the cutting of timber held for more than 1 year as a sale or exchange. Back tax filing You must make the election on your income tax return for the tax year to which it applies. Back tax filing 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. Back tax filing You generally report the gain as long-term capital gain. Back tax filing 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. Back tax filing For more information, see Timber in chapter 2 of Publication 544, Sales and Other Dispositions of Assets. Back tax filing   You may revoke an election to treat the cutting of timber as a sale or exchange without IRS's consent. Back tax filing The prior election (and revocation) is disregarded for purposes of making a subsequent election. Back tax filing See Form T (Timber), Forest Activities Schedule, for more information. Back tax filing Form T. Back tax filing   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. Back tax filing Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Understanding Your CP080 Notice

We credited payments and/or other credits to your tax account for the form and tax period shown on your notice. However, we haven't received your tax return.


What you need to do

  • If you are required to file this tax return please file today. Send your signed tax return to the address shown on the top of this notice.

Answers to Common Questions

What if I have already filed this return?
Please send a newly-signed copy to the address shown on the top of your notice.

What if I want the credit transferred to another tax form, tax period or tax identification number?
Please call us at 1-800-829-8374 to give us details of the account to which the credit should be transferred.

 

Page Last Reviewed or Updated: 07-Mar-2014

Printable samples of this notice (PDF)

 

 

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The Back Tax Filing

Back tax filing Publication 526 - Introductory Material Table of Contents Future Developments What's New Reminders IntroductionOrdering forms and publications. Back tax filing Tax questions. Back tax filing Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 526 (such as legislation enacted after we release it), go to www. Back tax filing irs. Back tax filing gov/pub526. Back tax filing What's New Limit on itemized deductions. Back tax filing  For 2013, you may have to reduce the total amount of certain itemized deductions, including charitable contributions, if your adjusted gross income is more than: $150,000 if married filing separately, $250,000 if single, $275,000 if head of household, or $300,000 if married filing jointly or qualifying widow(er). Back tax filing For more information and a worksheet, see the instructions for Schedule A (Form 1040). Back tax filing Reminders Disaster relief. Back tax filing  You can deduct contributions for flood relief, hurricane relief, or other disaster relief to a qualified organization (defined under Organizations That Qualify To Receive Deductible Contributions ). Back tax filing However, you cannot deduct contributions earmarked for relief of a particular individual or family. Back tax filing Publication 3833, Disaster Relief: Providing Assistance through Charitable Organizations, has more information about disaster relief, including how to establish a new charitable organization. Back tax filing You can also find more information on IRS. Back tax filing gov. Back tax filing Enter “disaster relief” in the search box. Back tax filing Photographs of missing children. Back tax filing  The IRS is a proud partner with the National Center for Missing and Exploited Children. Back tax filing Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Back tax filing You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Back tax filing Introduction This publication explains how to claim a deduction for your charitable contributions. Back tax filing It discusses the types of organizations to which you can make deductible charitable contributions and the types of contributions you can deduct. Back tax filing It also discusses how much you can deduct, what records you must keep, and how to report charitable contributions. Back tax filing A charitable contribution is a donation or gift to, or for the use of, a qualified organization. Back tax filing It is voluntary and is made without getting, or expecting to get, anything of equal value. Back tax filing Qualified organizations. Back tax filing   Qualified organizations include nonprofit groups that are religious, charitable, educational, scientific, or literary in purpose, or that work to prevent cruelty to children or animals. Back tax filing You will find descriptions of these organizations under Organizations That Qualify To Receive Deductible Contributions . Back tax filing Form 1040 required. Back tax filing   To deduct a charitable contribution, you must file Form 1040 and itemize deductions on Schedule A (Form 1040). Back tax filing The amount of your deduction may be limited if certain rules and limits explained in this publication apply to you. Back tax filing Comments and suggestions. Back tax filing   We welcome your comments about this publication and your suggestions for future editions. Back tax filing   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Back tax filing NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Back tax filing Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Back tax filing   You can send your comments from www. Back tax filing irs. Back tax filing gov/formspubs/. Back tax filing Click on “More Information” and then on “Comment on Tax Forms and Publications. Back tax filing ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Back tax filing Ordering forms and publications. Back tax filing   Visit www. Back tax filing irs. Back tax filing gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Back tax filing Internal Revenue Service 1201 N. Back tax filing Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Back tax filing   If you have a tax question, check the information available on IRS. Back tax filing gov or call 1-800-829-1040. Back tax filing We cannot answer tax questions sent to either of the above addresses. Back tax filing Useful Items - You may want to see: Publication 561 Determining the Value of Donated Property Form (and Instructions) Schedule A (Form 1040) Itemized Deductions 8283 Noncash Charitable Contributions  See How To Get Tax Help near the end of this publication for information about getting these publications and forms. Back tax filing Table 1. Back tax filing Examples of Charitable Contributions—A Quick Check Use the following lists for a quick check of whether you can deduct a contribution. Back tax filing See the rest of this publication for more information and additional rules and limits that may apply. Back tax filing Deductible As Charitable Contributions Not Deductible As Charitable Contributions Money or property you give to: Money or property you give to: Churches, synagogues, temples, mosques, and other religious organizations  Federal, state, and local governments, if your contribution is solely for public purposes (for example, a gift to reduce the public debt or maintain a public park)  Nonprofit schools and hospitals  The Salvation Army, American Red Cross, CARE, Goodwill Industries, United Way, Boy Scouts of America, Girl Scouts of America, Boys and Girls Clubs of America, etc. Back tax filing   War veterans' groups    Expenses paid for a student living with you, sponsored by a qualified organization  Out-of-pocket expenses when you serve a qualified organization as a volunteer Civic leagues, social and sports clubs, labor unions, and chambers of commerce  Foreign organizations (except certain Canadian, Israeli, and Mexican charities)  Groups that are run for personal profit  Groups whose purpose is to lobby for law changes  Homeowners' associations  Individuals  Political groups or candidates for public office    Cost of raffle, bingo, or lottery tickets  Dues, fees, or bills paid to country clubs, lodges, fraternal orders, or similar groups  Tuition  Value of your time or services  Value of blood given to a blood bank   Prev  Up  Next   Home   More Online Publications