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Permalink Reply by 0ym9x5ag7ury2 on September 15, 2014 at 12:54pm

Patrick,

       The company will send you a 1099 Form which will show the type of income. The bonus was marked as Rents & Royalties, which is what the royalties will be as well. I would think a Spud Fee would fall under Rents & Royalties as well. Follow the guidance on the back of the 1099 Form.

You could call the producer and ask how they are going to code the 1099.

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Permalink Reply by patrick on September 16, 2014 at 2:11am

Thanks , that is what I was looking for

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Permalink Reply by John on September 15, 2014 at 1:32pm

20 acres would be a very large pad site. Ours was 8 acres I believe. The way our lease read it was 30,000 for 7 acres and an amount ( can't remember what) for every acre over 7. Insure each lease is a. It different

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Permalink Reply by INVICTUS on September 16, 2014 at 11:00am

Damages. Make certain that the check you receive specifically states this.

Damages are a nontaxable event RE: income; however it will reduce the basis in the property.

If you treat it as ordinary income, it won't affect your basis.

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