Gas & Oil Royalties - Depletion Allowance Entry?

[Malissa]

Quote

From a topic 5-years ago that the OP quoted:

Transferees who cannot claim percentage depletion.   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. For a definition of the term “transfer,” see section 1.613A-7(n) of the regulations. For a definition of the term “interest in proven oil or gas property,” see section 1.613A-7(p) of the regulations.

Under 1-613A-7(n), inheritance is one of the transfers.

So, for the years between 1974 and 1990, no depletion allowance.

 

How do you enter depletion in ATX?  Do you attach it to a Sch E?  and does the above mean after 1990 a TRANSFER can take depletion?

Edited March 5, 2021 by jklcpa
moved post to its own topic instead of reviving 5-yr old thread

[schirallicpa]

I think  you have to know what type of well interest you have.  So I'm in western NY and there are small producers all over this area.  (Scrappers)  They get a straight 15% depletion deduction (their interest or amount to be reported as income * 15%).  If it's on a royalty, it is on Sch E.  If they are working the lease, it's on Sch C.  

However, in the bigger oil world, there is a whole different set of rules.