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Can I Efile My 2010 Taxes Now

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Can I Efile My 2010 Taxes Now

Can i efile my 2010 taxes now 6. Can i efile my 2010 taxes now   Estimated Tax Table of Contents Who Must Make Estimated Tax Payments Estimated tax is a method used to pay tax on income that is not subject to withholding. Can i efile my 2010 taxes now This income includes self-employment income, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. Can i efile my 2010 taxes now Income tax generally is withheld from pensions and annuity payments you receive. Can i efile my 2010 taxes now However, if the tax withheld from your pension (or other) income is not enough, you may have to pay estimated tax. Can i efile my 2010 taxes now If you do not pay enough tax through withholding, by making estimated tax payments, or both, you may be charged a penalty. Can i efile my 2010 taxes now Who Must Make Estimated Tax Payments If you had a tax liability for 2013, you may have to pay estimated tax for 2014. Can i efile my 2010 taxes now In most cases, you must pay estimated tax for 2014 if both of the following apply. Can i efile my 2010 taxes now You expect to owe at least $1,000 in tax for 2014, after subtracting your withholding and refundable credits. Can i efile my 2010 taxes now You expect your withholding and refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 tax return, or 100% of the tax shown on your 2013 tax return. Can i efile my 2010 taxes now The 2013 tax return must cover all 12 months. Can i efile my 2010 taxes now If all of your income will be subject to income tax withholding, you probably do not need to make estimated tax payments. Can i efile my 2010 taxes now For more information on estimated tax, see Publication 505. Can i efile my 2010 taxes now Prev  Up  Next   Home   More Online Publications
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The Can I Efile My 2010 Taxes Now

Can i efile my 2010 taxes now 9. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now Depletion unit. Can i efile my 2010 taxes now Introduction Depletion is the using up of natural resources by mining, drilling, quarrying stone, or cutting timber. Can i efile my 2010 taxes now The depletion deduction allows an owner or operator to account for the reduction of a product's reserves. Can i efile my 2010 taxes now There are two ways of figuring depletion: cost depletion and percentage depletion. Can i efile my 2010 taxes now For mineral property, you generally must use the method that gives you the larger deduction. Can i efile my 2010 taxes now For standing timber, you must use cost depletion. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now More than one person can have an economic interest in the same mineral deposit or timber. Can i efile my 2010 taxes now In the case of leased property, the depletion deduction is divided between the lessor and the lessee. Can i efile my 2010 taxes now You have an economic interest if both the following apply. Can i efile my 2010 taxes now You have acquired by investment any interest in mineral deposits or standing timber. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now A production payment carved out of, or retained on the sale of, mineral property is not an economic interest. Can i efile my 2010 taxes now Individuals, corporations, estates, and trusts who claim depletion deductions may be liable for alternative minimum tax. Can i efile my 2010 taxes now Basis adjustment for depletion. Can i efile my 2010 taxes now   You must reduce the basis of your property by the depletion allowed or allowable, whichever is greater. Can i efile my 2010 taxes now Mineral Property Mineral property includes oil and gas wells, mines, and other natural deposits (including geothermal deposits). Can i efile my 2010 taxes now For this purpose, the term “property” means each separate interest you own in each mineral deposit in each separate tract or parcel of land. Can i efile my 2010 taxes now You can treat two or more separate interests as one property or as separate properties. Can i efile my 2010 taxes now See section 614 of the Internal Revenue Code and the related regulations for rules on how to treat separate mineral interests. Can i efile my 2010 taxes now There are two ways of figuring depletion on mineral property. Can i efile my 2010 taxes now Cost depletion. Can i efile my 2010 taxes now Percentage depletion. Can i efile my 2010 taxes now Generally, you must use the method that gives you the larger deduction. Can i efile my 2010 taxes now However, unless you are an independent producer or royalty owner, you generally cannot use percentage depletion for oil and gas wells. Can i efile my 2010 taxes now See Oil and Gas Wells , later. Can i efile my 2010 taxes now Cost Depletion To figure cost depletion you must first determine the following. Can i efile my 2010 taxes now The property's basis for depletion. Can i efile my 2010 taxes now The total recoverable units of mineral in the property's natural deposit. Can i efile my 2010 taxes now The number of units of mineral sold during the tax year. Can i efile my 2010 taxes now Basis for depletion. Can i efile my 2010 taxes now   To figure the property's basis for depletion, subtract all the following from the property's adjusted basis. Can i efile my 2010 taxes now Amounts recoverable through: Depreciation deductions, Deferred expenses (including deferred exploration and development costs), and Deductions other than depletion. Can i efile my 2010 taxes now The residual value of land and improvements at the end of operations. Can i efile my 2010 taxes now The cost or value of land acquired for purposes other than mineral production. Can i efile my 2010 taxes now Adjusted basis. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now Your adjusted basis can never be less than zero. Can i efile my 2010 taxes now See Publication 551, Basis of Assets, for more information on adjusted basis. Can i efile my 2010 taxes now Total recoverable units. Can i efile my 2010 taxes now   The total recoverable units is the sum of the following. Can i efile my 2010 taxes now The number of units of mineral remaining at the end of the year (including units recovered but not sold). Can i efile my 2010 taxes now The number of units of mineral sold during the tax year (determined under your method of accounting, as explained next). Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now You must include ores and minerals that are developed, in sight, blocked out, or assured. Can i efile my 2010 taxes now You must also include probable or prospective ores or minerals that are believed to exist based on good evidence. Can i efile my 2010 taxes now But see Elective safe harbor for owners of oil and gas property , later. Can i efile my 2010 taxes now Number of units sold. Can i efile my 2010 taxes now   You determine the number of units sold during the tax year based on your method of accounting. Can i efile my 2010 taxes now Use the following table to make this determination. Can i efile my 2010 taxes now    IF you  use . Can i efile my 2010 taxes now . Can i efile my 2010 taxes now . Can i efile my 2010 taxes now THEN the units sold during the year are . Can i efile my 2010 taxes now . Can i efile my 2010 taxes now . Can i efile my 2010 taxes now The cash method of accounting The units sold for which you receive payment during the tax year (regardless of the year of sale). Can i efile my 2010 taxes now An accrual method of accounting The units sold based on your inventories and method of accounting for inventory. Can i efile my 2010 taxes now   The number of units sold during the tax year does not include any for which depletion deductions were allowed or allowable in earlier years. Can i efile my 2010 taxes now Figuring the cost depletion deduction. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now Step Action Result 1 Divide your property's basis for depletion by total recoverable units. Can i efile my 2010 taxes now Rate per unit. Can i efile my 2010 taxes now 2 Multiply the rate per unit by units sold during the tax year. Can i efile my 2010 taxes now Cost depletion deduction. Can i efile my 2010 taxes now You must keep accounts for the depletion of each property and adjust these accounts each year for units sold and depletion claimed. Can i efile my 2010 taxes now Elective safe harbor for owners of oil and gas property. Can i efile my 2010 taxes now   Instead of using the method described earlier to determine the total recoverable units, you can use an elective safe harbor. Can i efile my 2010 taxes now If you choose the elective safe harbor, the total recoverable units equal 105% of a property's proven reserves (both developed and undeveloped). Can i efile my 2010 taxes now For details, see Revenue Procedure 2004-19 on page 563 of Internal Revenue Bulletin 2004-10, available at www. Can i efile my 2010 taxes now irs. Can i efile my 2010 taxes now gov/pub/irs-irbs/irb04-10. Can i efile my 2010 taxes now pdf. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now The statement must indicate that you are electing the safe harbor provided by Revenue Procedure 2004-19. Can i efile my 2010 taxes now The election, if made, is effective for the tax year in which it is made and all later years. Can i efile my 2010 taxes now It cannot be revoked for the tax year in which it is elected, but may be revoked in a later year. Can i efile my 2010 taxes now Once revoked, it cannot be re-elected for the next 5 years. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now 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 . Can i efile my 2010 taxes now Rates and other rules for percentage depletion of other specific minerals are found later in Mines and Geothermal Deposits . Can i efile my 2010 taxes now Gross income. Can i efile my 2010 taxes now   When figuring percentage depletion, subtract from your gross income from the property the following amounts. Can i efile my 2010 taxes now Any rents or royalties you paid or incurred for the property. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now A bonus payment includes amounts you paid as a lessee to satisfy a production payment retained by the lessor. Can i efile my 2010 taxes now   Use the following fraction to figure the part of the bonus you must subtract. Can i efile my 2010 taxes now No. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now For other property, more information about the definition of gross income from the property is under Mines and Geothermal Deposits , later. Can i efile my 2010 taxes now Taxable income limit. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now These deductible items include, but are not limited to, the following. Can i efile my 2010 taxes now Operating expenses. Can i efile my 2010 taxes now Certain selling expenses. Can i efile my 2010 taxes now Administrative and financial overhead. Can i efile my 2010 taxes now Depreciation. Can i efile my 2010 taxes now Intangible drilling and development costs. Can i efile my 2010 taxes now Exploration and development expenditures. Can i efile my 2010 taxes now Deductible taxes (see chapter 5), but not taxes that you capitalize or take as a credit. Can i efile my 2010 taxes now Losses sustained. Can i efile my 2010 taxes now   The following rules apply when figuring your taxable income from the property for purposes of the taxable income limit. Can i efile my 2010 taxes now Do not deduct any net operating loss deduction from the gross income from the property. Can i efile my 2010 taxes now Corporations do not deduct charitable contributions from the gross income from the property. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now See section 1. Can i efile my 2010 taxes now 613-5(b)(1) of the regulations for information on how to figure the ordinary gain allocable to the property. Can i efile my 2010 taxes now Oil and Gas Wells You cannot claim percentage depletion for an oil or gas well unless at least one of the following applies. Can i efile my 2010 taxes now You are either an independent producer or a royalty owner. Can i efile my 2010 taxes now The well produces natural gas that is either sold under a fixed contract or produced from geopressured brine. Can i efile my 2010 taxes now If you are an independent producer or royalty owner, see Independent Producers and Royalty Owners , next. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now However, certain refiners, as explained next, and certain retailers and transferees of proven oil and gas properties, as explained next, cannot claim percentage depletion. Can i efile my 2010 taxes now For information on figuring the deduction, see Figuring percentage depletion , later. Can i efile my 2010 taxes now Refiners who cannot claim percentage depletion. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now Related person. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now For example, a corporation, partnership, estate, or trust and anyone who holds a significant ownership interest in it are related persons. Can i efile my 2010 taxes now A partnership and a trust are related persons if one person holds a significant ownership interest in each of them. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now The value of the outstanding stock of a corporation. Can i efile my 2010 taxes now The interest in the profits or capital of a partnership. Can i efile my 2010 taxes now The beneficial interests in an estate or trust. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now Retailers who cannot claim percentage depletion. Can i efile my 2010 taxes now   You cannot claim percentage depletion if both the following apply. Can i efile my 2010 taxes now You sell oil or natural gas or their by-products directly or through a related person in any of the following situations. Can i efile my 2010 taxes now Through a retail outlet operated by you or a related person. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now   For the purpose of determining if this rule applies, do not count the following. Can i efile my 2010 taxes now Bulk sales (sales in very large quantities) of oil or natural gas to commercial or industrial users. Can i efile my 2010 taxes now Bulk sales of aviation fuels to the Department of Defense. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now Related person. Can i efile my 2010 taxes now   To determine if you and another person are related persons, see Related person under Refiners who cannot claim percentage depletion, earlier. Can i efile my 2010 taxes now Sales through a related person. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now   You are not considered to be selling through a related person who is a retailer if all the following apply. Can i efile my 2010 taxes now You do not have a significant ownership interest in the retailer. Can i efile my 2010 taxes now You sell your production to persons who are not related to either you or the retailer. Can i efile my 2010 taxes now The retailer does not buy oil or natural gas from your customers or persons related to your customers. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now Transferees who cannot claim percentage depletion. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now For a definition of the term “transfer,” see section 1. Can i efile my 2010 taxes now 613A-7(n) of the regulations. Can i efile my 2010 taxes now For a definition of the term “interest in proven oil or gas property,” see section 1. Can i efile my 2010 taxes now 613A-7(p) of the regulations. Can i efile my 2010 taxes now Figuring percentage depletion. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now 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%. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now   In addition, there is a limit on the percentage depletion deduction. Can i efile my 2010 taxes now See Taxable income limit , later. Can i efile my 2010 taxes now Average daily production. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now Partial interest. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now   You have a partial interest in the production from a property if you have a net profits interest in the property. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now To figure this percentage, you divide the income you receive for your net profits interest by the gross revenue from the property. Can i efile my 2010 taxes now Then multiply the total production from the property by your percentage participation to figure your share of the production. Can i efile my 2010 taxes now Example. Can i efile my 2010 taxes now Javier Robles owns oil property in which Pablo Olmos owns a 20% net profits interest. Can i efile my 2010 taxes now During the year, the property produced 10,000 barrels of oil, which Javier sold for $200,000. Can i efile my 2010 taxes now Javier had expenses of $90,000 attributable to the property. Can i efile my 2010 taxes now The property generated a net profit of $110,000 ($200,000 − $90,000). Can i efile my 2010 taxes now Pablo received income of $22,000 ($110,000 × . Can i efile my 2010 taxes now 20) for his net profits interest. Can i efile my 2010 taxes now 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). Can i efile my 2010 taxes now Pablo determined his share of the oil production to be 1,100 barrels (10,000 barrels × 11%). Can i efile my 2010 taxes now Depletable oil or natural gas quantity. Can i efile my 2010 taxes now   Generally, your depletable oil quantity is 1,000 barrels. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now Example. Can i efile my 2010 taxes now You have both oil and natural gas production. Can i efile my 2010 taxes now To figure your depletable natural gas quantity, you choose to apply 360 barrels of your 1000-barrel depletable oil quantity. Can i efile my 2010 taxes now Your depletable natural gas quantity is 2. Can i efile my 2010 taxes now 16 million cubic feet of gas (360 × 6000). Can i efile my 2010 taxes now You must reduce your depletable oil quantity to 640 barrels (1000 − 360). Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now Also, see Notice 2012-50, available at www. Can i efile my 2010 taxes now irs. Can i efile my 2010 taxes now gov/irb/2012–31_IRB/index. Can i efile my 2010 taxes now html. Can i efile my 2010 taxes now Business entities and family members. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now 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). Can i efile my 2010 taxes now You and your spouse and minor children. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now Controlled group of corporations. Can i efile my 2010 taxes now   Members of the same controlled group of corporations are treated as one taxpayer when figuring the depletable oil or natural gas quantity. Can i efile my 2010 taxes now They share the depletable quantity. Can i efile my 2010 taxes now 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%. Can i efile my 2010 taxes now ” Gross income from the property. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now   Gross income from the property does not include lease bonuses, advance royalties, or other amounts payable without regard to production from the property. Can i efile my 2010 taxes now Average daily production exceeds depletable quantities. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now Figure your average daily production of oil or natural gas for the year. Can i efile my 2010 taxes now Figure your depletable oil or natural gas quantity for the year. Can i efile my 2010 taxes now Figure depletion for all oil or natural gas produced from the property using a percentage depletion rate of 15%. Can i efile my 2010 taxes now 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). Can i efile my 2010 taxes now This is your depletion allowance for that property for the year. Can i efile my 2010 taxes now Taxable income limit. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now For a definition of taxable income from the property, see Taxable income limit , earlier, under Mineral Property. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now You can carry over to the following year any amount you cannot deduct because of the 65%-of-taxable-income limit. Can i efile my 2010 taxes now Add it to your depletion allowance (before applying any limits) for the following year. Can i efile my 2010 taxes now Partnerships and S Corporations Generally, each partner or S corporation shareholder, and not the partnership or S corporation, figures the depletion allowance separately. Can i efile my 2010 taxes now (However, see Electing large partnerships must figure depletion allowance , later. Can i efile my 2010 taxes now ) Each partner or shareholder must decide whether to use cost or percentage depletion. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now Partner's or shareholder's adjusted basis. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now The partnership or S corporation makes the allocation as of the date it acquires the oil or gas property. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now However, in some cases, it is figured according to the partner's interest in partnership income. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now Recordkeeping. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now The partner or shareholder must reduce his or her adjusted basis by the depletion allowed or allowable on the property each year. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now Reporting the deduction. Can i efile my 2010 taxes now   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). Can i efile my 2010 taxes now Deduct oil and gas depletion for your partnership or S corporation interest on Schedule E (Form 1040). Can i efile my 2010 taxes now The depletion deducted on Schedule E is included in figuring income or loss from rental real estate or royalty properties. Can i efile my 2010 taxes now The instructions for Schedule E explain where to report this income or loss and whether you need to file either of the following forms. Can i efile my 2010 taxes now Form 6198, At-Risk Limitations. Can i efile my 2010 taxes now Form 8582, Passive Activity Loss Limitations. Can i efile my 2010 taxes now Electing large partnerships must figure depletion allowance. Can i efile my 2010 taxes now   An electing large partnership, rather than each partner, generally must figure the depletion allowance. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now Also, the adjusted basis of a partner's interest in the partnership is not affected by the depletion allowance. Can i efile my 2010 taxes now   An electing large partnership is one that meets both the following requirements. Can i efile my 2010 taxes now The partnership had 100 or more partners in the preceding year. Can i efile my 2010 taxes now The partnership chooses to be an electing large partnership. Can i efile my 2010 taxes now Disqualified persons. Can i efile my 2010 taxes now   An electing large partnership does not figure the depletion allowance of its partners that are disqualified persons. Can i efile my 2010 taxes now Disqualified persons must figure it themselves, as explained earlier. Can i efile my 2010 taxes now   All the following are disqualified persons. Can i efile my 2010 taxes now Refiners who cannot claim percentage depletion (discussed under Independent Producers and Royalty Owners , earlier). Can i efile my 2010 taxes now Retailers who cannot claim percentage depletion (discussed under Independent Producers and Royalty Owners , earlier). Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now Average daily production is discussed earlier. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now Natural gas sold under a fixed contract. Can i efile my 2010 taxes now   Natural gas sold under a fixed contract qualifies for a percentage depletion rate of 22%. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now The contract must have been in effect from February 1, 1975, until the date of sale of the gas. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now Natural gas from geopressured brine. Can i efile my 2010 taxes now   Qualified natural gas from geopressured brine is eligible for a percentage depletion rate of 10%. Can i efile my 2010 taxes now This is natural gas that is both the following. Can i efile my 2010 taxes now Produced from a well you began to drill after September 1978 and before 1984. Can i efile my 2010 taxes now Determined in accordance with section 503 of the Natural Gas Policy Act of 1978 to be produced from geopressured brine. Can i efile my 2010 taxes now Mines and Geothermal Deposits Certain mines, wells, and other natural deposits, including geothermal deposits, qualify for percentage depletion. Can i efile my 2010 taxes now Mines and other natural deposits. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now   The following is a list of the percentage depletion rates for the more common minerals. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now Corporate deduction for iron ore and coal. Can i efile my 2010 taxes now   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). Can i efile my 2010 taxes now Gross income from the property. Can i efile my 2010 taxes now   For property other than a geothermal deposit or an oil or gas well, gross income from the property means the gross income from mining. Can i efile my 2010 taxes now Mining includes all the following. Can i efile my 2010 taxes now Extracting ores or minerals from the ground. Can i efile my 2010 taxes now Applying certain treatment processes described later. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now Excise tax. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now Extraction. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now Treatment processes. Can i efile my 2010 taxes now   The processes included as mining depend on the ore or mineral mined. Can i efile my 2010 taxes now To qualify as mining, the treatment processes must be applied by the mine owner or operator. Can i efile my 2010 taxes now For a listing of treatment processes considered as mining, see section 613(c)(4) of the Internal Revenue Code and the related regulations. Can i efile my 2010 taxes now Transportation of more than 50 miles. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now    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. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now For more information about requesting an advance ruling, see Revenue Procedure 2013-1, available at www. Can i efile my 2010 taxes now irs. Can i efile my 2010 taxes now gov/irb/2013-01_IRB/ar11. Can i efile my 2010 taxes now html. Can i efile my 2010 taxes now Disposal of coal or iron ore. Can i efile my 2010 taxes now   You cannot take a depletion deduction for coal (including lignite) or iron ore mined in the United States if both the following apply. Can i efile my 2010 taxes now You disposed of it after holding it for more than 1 year. Can i efile my 2010 taxes now You disposed of it under a contract under which you retain an economic interest in the coal or iron ore. Can i efile my 2010 taxes now Treat any gain on the disposition as a capital gain. Can i efile my 2010 taxes now Disposal to related person. Can i efile my 2010 taxes now   This rule does not apply if you dispose of the coal or iron ore to one of the following persons. Can i efile my 2010 taxes now A related person (as listed in chapter 2 of Publication 544). Can i efile my 2010 taxes now A person owned or controlled by the same interests that own or control you. Can i efile my 2010 taxes now Geothermal deposits. Can i efile my 2010 taxes now   Geothermal deposits located in the United States or its possessions qualify for a percentage depletion rate of 15%. Can i efile my 2010 taxes now A geothermal deposit is a geothermal reservoir of natural heat stored in rocks or in a watery liquid or vapor. Can i efile my 2010 taxes now For percentage depletion purposes, a geothermal deposit is not considered a gas well. Can i efile my 2010 taxes now   Figure gross income from the property for a geothermal steam well in the same way as for oil and gas wells. Can i efile my 2010 taxes now See Gross income from the property , earlier, under Oil and Gas Wells. Can i efile my 2010 taxes now Percentage depletion on a geothermal deposit cannot be more than 50% of your taxable income from the property. Can i efile my 2010 taxes now Lessor's Gross Income In the case of leased property, the depletion deduction is divided between the lessor and the lessee. Can i efile my 2010 taxes now A lessor's gross income from the property that qualifies for percentage depletion usually is the total of the royalties received from the lease. Can i efile my 2010 taxes now Bonuses and advanced royalties. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now Figuring cost depletion. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now Figuring percentage depletion. Can i efile my 2010 taxes now   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 . Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now Ending the lease. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now Do this for the year the lease ends or is abandoned. Can i efile my 2010 taxes now Also increase your adjusted basis in the property to restore the depletion deduction you previously subtracted. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now Include this amount in income for the year the lease ends. Can i efile my 2010 taxes now Increase your adjusted basis in the property by the amount you include in income. Can i efile my 2010 taxes now Delay rentals. Can i efile my 2010 taxes now   These are payments for deferring development of the property. Can i efile my 2010 taxes now Since delay rentals are ordinary rent, they are ordinary income that is not subject to depletion. Can i efile my 2010 taxes now These rentals can be avoided by either abandoning the lease, beginning development operations, or obtaining production. Can i efile my 2010 taxes now Timber You can figure timber depletion only by the cost method. Can i efile my 2010 taxes now Percentage depletion does not apply to timber. Can i efile my 2010 taxes now Base your depletion on your cost or other basis in the timber. Can i efile my 2010 taxes now Your cost does not include the cost of land or any amounts recoverable through depreciation. Can i efile my 2010 taxes now Depletion takes place when you cut standing timber. Can i efile my 2010 taxes now You can figure your depletion deduction when the quantity of cut timber is first accurately measured in the process of exploitation. Can i efile my 2010 taxes now Figuring cost depletion. Can i efile my 2010 taxes now   To figure your cost depletion allowance, you multiply the number of timber units cut by your depletion unit. Can i efile my 2010 taxes now Timber units. Can i efile my 2010 taxes now   When you acquire timber property, you must make an estimate of the quantity of marketable timber that exists on the property. Can i efile my 2010 taxes now You measure the timber using board feet, log scale, cords, or other units. Can i efile my 2010 taxes now If you later determine that you have more or less units of timber, you must adjust the original estimate. Can i efile my 2010 taxes now   The term “timber property” means your economic interest in standing timber in each tract or block representing a separate timber account. Can i efile my 2010 taxes now Depletion unit. Can i efile my 2010 taxes now   You figure your depletion unit each year by taking the following steps. Can i efile my 2010 taxes now Determine your cost or adjusted basis of the timber on hand at the beginning of the year. Can i efile my 2010 taxes now Adjusted basis is defined under Cost Depletion in the discussion on Mineral Property. Can i efile my 2010 taxes now Add to the amount determined in (1) the cost of any timber units acquired during the year and any additions to capital. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now Divide the result of (2) by the result of (3). Can i efile my 2010 taxes now This is your depletion unit. Can i efile my 2010 taxes now Example. Can i efile my 2010 taxes now You bought a timber tract for $160,000 and the land was worth as much as the timber. Can i efile my 2010 taxes now Your basis for the timber is $80,000. Can i efile my 2010 taxes now 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). Can i efile my 2010 taxes now If you cut 500 MBF of timber, your depletion allowance would be $40,000 (500 MBF × $80). Can i efile my 2010 taxes now When to claim depletion. Can i efile my 2010 taxes now   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). Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now The inventory is your basis for determining gain or loss in the tax year you sell the timber products. Can i efile my 2010 taxes now Example. Can i efile my 2010 taxes now The facts are the same as in the previous example except that you sold only half of the timber products in the cutting year. Can i efile my 2010 taxes now You would deduct $20,000 of the $40,000 depletion that year. Can i efile my 2010 taxes now You would add the remaining $20,000 depletion to your closing inventory of timber products. Can i efile my 2010 taxes now Electing to treat the cutting of timber as a sale or exchange. Can i efile my 2010 taxes now   You can elect, under certain circumstances, to treat the cutting of timber held for more than 1 year as a sale or exchange. Can i efile my 2010 taxes now You must make the election on your income tax return for the tax year to which it applies. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now You generally report the gain as long-term capital gain. Can i efile my 2010 taxes now 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. Can i efile my 2010 taxes now For more information, see Timber in chapter 2 of Publication 544, Sales and Other Dispositions of Assets. Can i efile my 2010 taxes now   You may revoke an election to treat the cutting of timber as a sale or exchange without IRS's consent. Can i efile my 2010 taxes now The prior election (and revocation) is disregarded for purposes of making a subsequent election. Can i efile my 2010 taxes now See Form T (Timber), Forest Activities Schedule, for more information. Can i efile my 2010 taxes now Form T. Can i efile my 2010 taxes now   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. Can i efile my 2010 taxes now Prev  Up  Next   Home   More Online Publications