Edward Posted March 25, 2011 Report Posted March 25, 2011 Client signed oil lease regarding seismic surface testing of which it was agreed that the 5,206.00 was for surface damages. QF Special Tax Situations says "Receipient's tax treatment of these damages is "Return of capital to extent of property's basis; and that excess is Section 1231 gain. My question is where do I place this - part I or Part III of the 4797. Will appreciate any ideas. Quote
Pacun Posted March 26, 2011 Report Posted March 26, 2011 Client signed oil lease regarding seismic surface testing of which it was agreed that the 5,206.00 was for surface damages. QF Special Tax Situations says "Receipient's tax treatment of these damages is "Return of capital to extent of property's basis; and that excess is Section 1231 gain. My question is where do I place this - part I or Part III of the 4797. Will appreciate any ideas. What's his basis on the property? If enough, you just reduce the basis. Quote
Edward Posted March 26, 2011 Author Report Posted March 26, 2011 3200.00 so he has 2006.00 1231 gain. Quote
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.