income taxes savings on royalty's?

I tried reading back though old post, but didn't see many answers.

    Did you continue to use your normal tax preparer or did you seek out someone new to deal with or hopefully save you money on taxes?   Did you set up an new structures to deal with or help save tax?

    I've asked my accountant/ tax preparer I've used for 15 years, but he didnt give me much hope in reducing the income taxes paid other than to find a right off from my day to day business, but thats risky for valuations on resale. 

  I'll have about 3-4% of property in about a  700 acres unit that should go into production mid 2025 in northeast ohio.

   

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Permalink Reply by paleface on January 12, 2025 at 3:29am

Tell your accountant to use 15% depletion deduction when you start getting royalties. 

Permalink Reply by tacoma7583 11 hours ago

I've used the 15% depletion on old Clinton wells,  just didn't know if anyone used any other legitimate tax deductions.   

Permalink Reply by Andy on January 13, 2025 at 6:01am
Tacoma,
Which unit will you be in? Is it the kitzmiller well? Have you heard of any new pads coming up next?
Permalink Reply by tacoma7583 11 hours ago

Yes Kitzmiller well, I've not heard of any other pad sites in Knox township or west township.  no one seems to know why they are only doing 2 "legs" to the SE on the Kitzmiller pad, a lot of infrastructure to only  drill 2 the one direction.  The pipeline company had staked out a "New Franklin"  pipeline last year , that I thought was to run over  to west township to some of the whitleather properties, but the talk was issues about the pad location, Ironhead leased a bunch of land that way with Johnson & Johnson land group.   There is a site down by great trail golf course in Minerva, that the well pad is in columbiana, but the current drilling will be SE into carroll county 

I think in Knox township, it might be more challenging for pad sites, even though we are rural and them needing to  be  close to county roads, to keep expenses down for road improvements 

Permalink Reply by Dott on January 15, 2025 at 12:42pm

Since we are talking taxes and Depletion. I inherited my Royalties and was told by a Tax Preparer that since I inherited them and did not purchase the property or Oil & Gas rights for investment purposes that I could not legally claim 15% yearly depletion on my income taxes. He showed me the IRS Code. 

I did some research and others who have inherited their rights say they have been taking the deduction for years without issue. Some websites turn the IRS Statements around and say it's a grey area.

Those of you who have inherited your Oil & Gas Rights and have a CPA's or Tax Preparer doing your taxes what have you been advised? Are you taking the 15% depletion deduction?

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