oil gas partnership k-1

[pkmiller94]

Have a client who is making investments in a public oil/gas partnership

There is supplement informtion thay says "Your share of DPGR is from qualifying oil and gas activities, as reportable on Form 8903" - The k-1 show $3K in box 1. Box 13j depletion of $800. Box 13T saws to look at the supplement statement.

13T1 Domestic Production Gross Receipts -12K

13T2 DPGR Cost of Goods Sold -10K

13T3 DPGR Allocable Expenses -1.5K

13T4 W-2 Wages Properly Allocable to DPGR - 0

17E Oil, gas, & geothermal deductions -10K

F1 Excess Intangible Drilling Costs 767

20T1 Sustained - Assumed Allowable Depletion 1537

20T2 Cost Depletion 1540

20Y1 Gross Receipts -13K

In ATX all 3K is going to page 1 as income - I to take a election to take the depletion of $800 (or is it already included in box 1?)

The TP has a w-2 of about $50K

Question - Cannot get anynumbers in 8903 - but when I override - I get about a $25 deduction

Can I take the % depeltion over the amount on the k-1

the tp claims she is losing money on this and cannot believe the taxable income

Any thoughts?

[JohnH]

Isn't it great how people let their financial advisors talk them into this stuff and then want us to explain it to them because neither they nor the advisor have a clue about what's happening with the "investment"? (Well, the advisor does know enough to understand that it pays a generous commission, but that isn't going to enter the conversation. I always mention that to the client and suggest that they make him earn it.)

[Lion EA]

Depletion always has me looking it up, and my energy K-1s haven't come in yet.

But, I do know that DPGR is limited by W-2 wages, which in your case are 0 so no DPGR. Use the numbers from the K-1; don't override.

[Joel]

Yes, but don't forget to take the depletion allowance from line 20T2. It is a new k-1 entry for the partnership with the added words depletion and a minus amount on line 1.

[JRS]

Most oil/gas PTPs K-1 packages are online at the below website. If you have your clients permission, you can view the K-1 package and usually, it will show what amounts will go on the 8903 (and their other forms). In most cases, the 8903 will be blank, meaning no credit available.

It is simple to register, your email and a password. Then go to the PTP and follow the steps.

https://www.taxpackagesupport.com/(S(dohbix5512stio55dp3tt4r0))/k1SupportHome.aspx