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File An Amendment

File an amendment Index A Accelerated death benefits, Accelerated Death Benefits Accounting periods Change in, standard deduction not allowed, Persons not eligible for the standard deduction. File an amendment Accrued leave payment Disability retirement and, Accrued leave payment. File an amendment Adjusted gross income (AGI), Adjustments to Income Adjustments to income, Adjustments to Income Age Standard deduction for age 65 or older, Higher standard deduction for age (65 or older). File an amendment Age 65, Qualified Individual American Association of Retired Persons (AARP), Volunteer Income Tax Assistance and Tax Counseling for the Elderly. File an amendment Annuities, Pensions and Annuities Assistance (see Tax help) B Base amount, social security benefits, Base Amount Benefits Accident or health, Other compensation. File an amendment Long-term care, Long-Term Care Insurance Contracts No-fault insurance, Other compensation. File an amendment Sickness and injury, Sickness and Injury Benefits Social security, Are Any of Your Benefits Taxable? Veterans', Veterans' benefits. File an amendment Bequests, Gifts and inheritances. File an amendment Blind persons Standard deduction for, Higher standard deduction for blindness. File an amendment C Child and dependent care credit, Child and Dependent Care Credit Children Standard deduction for, Standard Deduction for Dependents Chronically ill persons, Chronically ill individual. File an amendment Chronically ill, defined, Terminally or chronically ill defined. File an amendment Compensation For services, Compensation for Services Loss or disfigurement, Other compensation. File an amendment Contributions Foreign employment, Foreign employment contributions. File an amendment Pension or annuity, Cost. File an amendment Cost, pension or annuity, Cost. File an amendment Credit Child and dependent care, Child and Dependent Care Credit Earned income, Earned Income Credit (EIC) The elderly or the disabled, Credit for the Elderly or the Disabled Credit for the elderly or the disabled, Credit for the Elderly or the Disabled D Death benefit, accelerated, Accelerated Death Benefits Decedents, Dependents. File an amendment Standard deduction, Decedent's final return. File an amendment Deductions Generally, Deductions Insurance premiums, Medical Insurance Premiums Itemized, Itemized Deductions Meals and lodging, Meals and Lodging Medical and dental, Medical and Dental Expenses Standard, Standard Deduction Dependents, Dependents. File an amendment Standard deduction for, Standard Deduction for Dependents Disabilities, individuals with Ownership and use test, Exception to use test for individuals with a disability. File an amendment Disability Person with, Persons with disabilities. File an amendment Physician's statement, Physician's statement. File an amendment Total and permanent, Permanent and total disability. File an amendment Disability income, Disability Pensions, Other compensation. File an amendment , Disability income. File an amendment Distributions, retirement plan, Retirement Plan Distributions Drugs (see Medicines) Dual-status taxpayers Standard deduction, Persons not eligible for the standard deduction. File an amendment E Early distributions, tax, Tax on Early Distributions Earned income credit, Earned Income Credit (EIC) Elderly or disabled credit, Credit for the Elderly or the Disabled Elderly persons Standard deduction for age 65 or older, Higher standard deduction for age (65 or older). File an amendment Employment tax withholding, Reminders Employment taxes, Employment taxes. File an amendment Endowment proceeds, Endowment Contract Proceeds Estimated tax, Tax Withholding and Estimated Tax, Estimated Tax, Who Must Make Estimated Tax Payments Excess accumulation, tax on, Tax on Excess Accumulation Exclusion, gain on sale of home, Maximum Amount of Exclusion F Federal Employees Compensation Act (FECA) payments, Federal Employees' Compensation Act (FECA). File an amendment Filing requirements Decedents, Dependents. File an amendment General requirements, General Requirements Surviving spouse, Surviving spouse. File an amendment Final return for decedent Standard deduction, Decedent's final return. File an amendment First-time homebuyer credit Recapture, Repaying the first-time homebuyer credit because you sold your home. File an amendment Form, Credit for the Elderly or the Disabled, Physician's statement. File an amendment 1099-R, Form 1099-R. File an amendment , Form 1099-R. File an amendment 5329, Form 5329. File an amendment 8853, Accelerated Death Benefits Schedule R, Credit for the Elderly or the Disabled, Physician's statement. File an amendment W-4P, Withholding. File an amendment Free tax services, Free help with your tax return. File an amendment G Gain on sale of home (see Sale of home) General rule, pension or annuity, Pensions and Annuities Gifts, Gifts and inheritances. File an amendment H Help (see Tax help) Home care (see Nursing services) Home improvements, Home Improvements Home, sale of, Sale of Home Hospital services, Hospital Services Household help, Household Help I Income Adjustments, Adjustments to Income Disability, Disability Pensions, Disability income. File an amendment Gross, defined, Gross income. File an amendment Nontaxable, Taxable and Nontaxable Income Sale of home, Sale of Home Self-employment, Self-employed persons. File an amendment Taxable, Taxable and Nontaxable Income Individual retirement arrangement (IRA) Adjustments to income, Individual Retirement Arrangement (IRA) Contributions and Deductions Contributions, Contributions. File an amendment Deductible contribution, Deductible contribution. File an amendment Distributions, Individual Retirement Arrangements (IRAs) Inheritances, Gifts and inheritances. File an amendment Injury benefits, Sickness and Injury Benefits, Cost paid by you. File an amendment Insurance Accident and health, Other compensation. File an amendment , Medical Insurance Premiums Benefits, long-term care, Long-Term Care Insurance Contracts Benefits, no-fault insurance, Other compensation. File an amendment Life insurance proceeds, Life Insurance Proceeds Proceeds paid after death, Life Insurance Proceeds Proceeds paid before death, Accelerated Death Benefits Insurance premiums for retired public safety officers, Insurance Premiums for Retired Public Safety Officers Itemized deductions, Itemized Deductions Married filing separately One spouse has itemized, Persons not eligible for the standard deduction. File an amendment L Life insurance proceeds, Life Insurance Proceeds Long-term care, Long-Term Care Chronically ill individuals, Chronically ill individual. File an amendment Maintenance and personal care services, Maintenance and personal care services. File an amendment Qualified insurance contracts, Qualified long-term care insurance contracts. File an amendment Qualified services, Qualified long-term care services. File an amendment Long-term care insurance, Long-Term Care Insurance Contracts Loss or disfigurement compensation, Other compensation. File an amendment Lump-sum distributions, Lump-sum distributions. File an amendment Lump-sum election, social security, Lump-Sum Election M Maintenance and personal care services, Maintenance and personal care services. File an amendment Married filing separately Itemized deductions One spouse has itemized so other must as well, Persons not eligible for the standard deduction. File an amendment Married taxpayers Age 65 or older spouse Standard deduction, Spouse 65 or older or blind. File an amendment Blind spouse Standard deduction, Spouse 65 or older or blind. File an amendment Meals and lodging expenses, Meals and Lodging Medical expenses, Medical and Dental Expenses Medicare, Medicare Part A. File an amendment , Medicare Part B. File an amendment , Medicare Part D. File an amendment Benefits, Medicare. File an amendment Medicines, Medicines Imported, Imported medicines and drugs. File an amendment Military retirement pay, Military Retirement Pay Minimum distributions, Tax on Excess Accumulation Minimum wage, Substantial gainful activity. File an amendment Missing children, Reminders Mortgage assistance payments, Mortgage assistance payments. File an amendment N Nonperiodic distributions, Nonperiodic Distributions Nonqualified use, Period of nonqualified use. File an amendment Nonresident aliens Standard deduction, Persons not eligible for the standard deduction. File an amendment Nontaxable income, Payments from a state fund for victims of crime. File an amendment Accident or health insurance benefits, Other compensation. File an amendment Bequests, Gifts and inheritances. File an amendment Generally, Taxable and Nontaxable Income Gifts, Gifts and inheritances. File an amendment Inheritances, Gifts and inheritances. File an amendment Mortgage assistance payments, Mortgage assistance payments. File an amendment No-fault insurance benefits, Other compensation. File an amendment Nutrition program for elderly, Nutrition Program for the Elderly. File an amendment Public assistance payments, Welfare benefits. File an amendment Sickness and injury benefits, Sickness and Injury Benefits Veterans' benefits, Veterans' benefits. File an amendment Winter energy use, Payments to reduce cost of winter energy use. File an amendment Workers' compensation, Workers' Compensation Nursing home, Nursing home. File an amendment Nursing services, Nursing Services Chronically ill individuals, Chronically ill individual. File an amendment Nutrition program for elderly, Nutrition Program for the Elderly. File an amendment O Old-age, survivors, and disability insurance benefits (OASDI), Old-age, survivors, and disability insurance benefits (OASDI). File an amendment Other items, Other Items Overall limitation, Overall limitation. File an amendment P Payments, estimated tax, Estimated Tax Pensions, Pensions and Annuities Pensions, disability, Disability Pensions Photographs, missing children, Reminders Physician's statement, disability, Physician's statement. File an amendment Prepaid insurance premiums, Prepaid insurance premiums. File an amendment Preparer, paid, Reminders Preparing your return, Return preparation assistance. File an amendment Profit-sharing plan, Retirement and profit-sharing plans. File an amendment Public assistance payments, Welfare benefits. File an amendment Publications (see Tax help) Q Qualified retirement plan, Tax on Early Distributions R Railroad retirement benefits, Railroad Retirement Benefits, Social Security and Equivalent Railroad Retirement Benefits Repayments Social security benefits, Repayment of Benefits Reporting pension income, How to report. File an amendment Residence, sale of, Sale of Home Retirement plans, distributions, Retirement Plan Distributions Returns Decedent, Dependents. File an amendment Executors and administrators, Dependents. File an amendment Filing requirements, 2013 Filing Requirements Surviving spouse, Surviving spouse. File an amendment Reverse mortgages, Reverse Mortgages S Salaries (see Compensation) Sale of Home First-time homebuyer credit, Repaying the first-time homebuyer credit because you sold your home. File an amendment Surviving spouse, Reminders Sale of home, Sale of Home Self-employed, Self-employed persons. File an amendment Short tax year Change in annual accounting period, Persons not eligible for the standard deduction. File an amendment Sickness and injury benefits, Sickness and Injury Benefits Simplified method, Pensions and Annuities Social security benefits, Social Security and Equivalent Railroad Retirement Benefits Standard deduction, Standard Deduction Age 65 or older, Higher standard deduction for age (65 or older). File an amendment Blind persons, Higher standard deduction for blindness. File an amendment Dependents, Standard Deduction for Dependents Final return of decedent, Decedent's final return. File an amendment Married filing separately One spouse has itemized, Persons not eligible for the standard deduction. File an amendment Starting date, annuity, Cost. File an amendment State fund for victims of crime, Payments from a state fund for victims of crime. File an amendment Substantial gainful activity, Substantial gainful activity. File an amendment Surrender of Iife insurance, Surrender of policy for cash. File an amendment Surviving Spouse, Reminders Surviving spouse, Surviving spouse. File an amendment Surviving spouse, insurance, Surviving spouse. File an amendment Survivors of retirees, Survivors of retirees. File an amendment T Tax Early distributions, Tax on Early Distributions Estimated, Tax Withholding and Estimated Tax, Estimated Tax Excess accumulation, Tax on Excess Accumulation Tax counseling for the elderly (TCE), Volunteer Income Tax Assistance and Tax Counseling for the Elderly. File an amendment Tax help, How To Get Tax Help Tax option, 10-year, Lump-sum distributions. File an amendment Tax return preparers, Reminders Taxable income, Taxable and Nontaxable Income Taxation of benefits, Are Any of Your Benefits Taxable? Terminally ill, defined, Terminally or chronically ill defined. File an amendment Total and permanent disability, defined, Permanent and total disability. File an amendment Transportation expenses, Transportation TTY/TDD information, How To Get Tax Help U U. File an amendment S. File an amendment citizen or resident, U. File an amendment S. File an amendment citizen or resident alien. File an amendment Unemployment compensation, Unemployment compensation. File an amendment V Veterans' benefits, Veterans' benefits. File an amendment Viatical settlement, Accelerated Death Benefits Victims of crime, Payments from a state fund for victims of crime. File an amendment Volunteer income tax assistance (VITA), Volunteer Income Tax Assistance and Tax Counseling for the Elderly. File an amendment Volunteer work, Volunteer work. File an amendment W Wages (see Compensation) Winter energy use payments, Payments to reduce cost of winter energy use. File an amendment Withholding Employment tax, Reminders Pensions and annuities, Withholding. File an amendment Workers' compensation, Workers' Compensation Worksheets, social security, Which worksheet to use. File an amendment Prev  Up     Home   More Online Publications
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Face-to-Face Tax Help

IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.

Keep in mind, many questions can be resolved online without waiting in line. Through IRS.gov you can:
• Set up a payment plan.
• Get a transcript of your tax return.
• Make a payment.
• Check on your refund.
• Find answers to many of your tax questions.

We are now referring all requests for tax return preparation services to other available resources. You can take advantage of free tax preparation through Free File, Free File Fillable Forms or through a volunteer site in your community. To find the nearest volunteer site location or to get more information about Free File, go to the top of the page and enter “Free Tax Help” in the Search box.

If you have a tax account issues and feel that it requires talking with someone face-to-face, visit your local TAC.

Caution:  Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.

Multilingual assistance is available in every office. Hours of operation are subject to change.

Before visiting your local office click on "Services Provided" in the chart below to see what services are available. Services are limited and not all services are available at every TAC office and may vary from site to site. You can get these services on a walk-in basis.

City  Street Address  Days/Hours of Service  Telephone* 
Boise  550 W. Fort St.
Boise, ID 83724 

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

Services Provided

(208) 387-2847 
Idaho Falls  1820 E. 17th St.
Idaho Falls, ID 83404 

Monday-Friday - 8:30 a.m.- 4:30 p.m. 
(Closed for lunch 12:00 noon-1:00 p.m.) 

 

Services Provided

(208) 523-8041 
Pocatello  275 S. 5th Ave.
Pocatello, ID 83201 

Monday-Friday - 8:30 a.m.- 4:30 p.m.
(Closed for lunch 12:00 noon-1:00 p.m.)

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(208) 236-6795 

* Note: The phone numbers in the chart above are not toll free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses).

For information on where to file your tax return please see Where to File Addresses.

The Taxpayer Advocate Service: Call 208-363-8900 in the Boise area or 1-877-777-4778 elsewhere, or see  Publication 1546, The Taxpayer Advocate Service of the IRS. For further information, see Tax Topic 104.

Partnerships

IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.

For more information about these programs for individuals and families, contact the Stakeholder Partnerships, Education and Communication Office at:

Internal Revenue Service
550 W. Fort Street, MS 6610BOI
Boise, ID 83724

For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:

Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.

Page Last Reviewed or Updated: 28-Mar-2014

The File An Amendment

File an amendment 9. File an amendment   Depletion Table of Contents Introduction Topics - This chapter discusses: Who Can Claim Depletion? Mineral PropertyCost Depletion Percentage Depletion Oil and Gas Wells Mines and Geothermal Deposits Lessor's Gross Income TimberTimber units. File an amendment Depletion unit. File an amendment Introduction Depletion is the using up of natural resources by mining, drilling, quarrying stone, or cutting timber. File an amendment The depletion deduction allows an owner or operator to account for the reduction of a product's reserves. File an amendment There are two ways of figuring depletion: cost depletion and percentage depletion. File an amendment For mineral property, you generally must use the method that gives you the larger deduction. File an amendment For standing timber, you must use cost depletion. File an amendment Topics - This chapter discusses: Who can claim depletion Mineral property Timber Who Can Claim Depletion? If you have an economic interest in mineral property or standing timber, you can take a deduction for depletion. File an amendment More than one person can have an economic interest in the same mineral deposit or timber. File an amendment In the case of leased property, the depletion deduction is divided between the lessor and the lessee. File an amendment You have an economic interest if both the following apply. File an amendment You have acquired by investment any interest in mineral deposits or standing timber. File an amendment You have a legal right to income from the extraction of the mineral or cutting of the timber to which you must look for a return of your capital investment. File an amendment A contractual relationship that allows you an economic or monetary advantage from products of the mineral deposit or standing timber is not, in itself, an economic interest. File an amendment A production payment carved out of, or retained on the sale of, mineral property is not an economic interest. File an amendment Individuals, corporations, estates, and trusts who claim depletion deductions may be liable for alternative minimum tax. File an amendment Basis adjustment for depletion. File an amendment   You must reduce the basis of your property by the depletion allowed or allowable, whichever is greater. File an amendment Mineral Property Mineral property includes oil and gas wells, mines, and other natural deposits (including geothermal deposits). File an amendment For this purpose, the term “property” means each separate interest you own in each mineral deposit in each separate tract or parcel of land. File an amendment You can treat two or more separate interests as one property or as separate properties. File an amendment See section 614 of the Internal Revenue Code and the related regulations for rules on how to treat separate mineral interests. File an amendment There are two ways of figuring depletion on mineral property. File an amendment Cost depletion. File an amendment Percentage depletion. File an amendment Generally, you must use the method that gives you the larger deduction. File an amendment However, unless you are an independent producer or royalty owner, you generally cannot use percentage depletion for oil and gas wells. File an amendment See Oil and Gas Wells , later. File an amendment Cost Depletion To figure cost depletion you must first determine the following. File an amendment The property's basis for depletion. File an amendment The total recoverable units of mineral in the property's natural deposit. File an amendment The number of units of mineral sold during the tax year. File an amendment Basis for depletion. File an amendment   To figure the property's basis for depletion, subtract all the following from the property's adjusted basis. File an amendment Amounts recoverable through: Depreciation deductions, Deferred expenses (including deferred exploration and development costs), and Deductions other than depletion. File an amendment The residual value of land and improvements at the end of operations. File an amendment The cost or value of land acquired for purposes other than mineral production. File an amendment Adjusted basis. File an amendment   The adjusted basis of your property is your original cost or other basis, plus certain additions and improvements, and minus certain deductions such as depletion allowed or allowable and casualty losses. File an amendment Your adjusted basis can never be less than zero. File an amendment See Publication 551, Basis of Assets, for more information on adjusted basis. File an amendment Total recoverable units. File an amendment   The total recoverable units is the sum of the following. File an amendment The number of units of mineral remaining at the end of the year (including units recovered but not sold). File an amendment The number of units of mineral sold during the tax year (determined under your method of accounting, as explained next). File an amendment   You must estimate or determine recoverable units (tons, pounds, ounces, barrels, thousands of cubic feet, or other measure) of mineral products using the current industry method and the most accurate and reliable information you can obtain. File an amendment You must include ores and minerals that are developed, in sight, blocked out, or assured. File an amendment You must also include probable or prospective ores or minerals that are believed to exist based on good evidence. File an amendment But see Elective safe harbor for owners of oil and gas property , later. File an amendment Number of units sold. File an amendment   You determine the number of units sold during the tax year based on your method of accounting. File an amendment Use the following table to make this determination. File an amendment    IF you  use . File an amendment . File an amendment . File an amendment THEN the units sold during the year are . File an amendment . File an amendment . File an amendment The cash method of accounting The units sold for which you receive payment during the tax year (regardless of the year of sale). File an amendment An accrual method of accounting The units sold based on your inventories and method of accounting for inventory. File an amendment   The number of units sold during the tax year does not include any for which depletion deductions were allowed or allowable in earlier years. File an amendment Figuring the cost depletion deduction. File an amendment   Once you have figured your property's basis for depletion, the total recoverable units, and the number of units sold during the tax year, you can figure your cost depletion deduction by taking the following steps. File an amendment Step Action Result 1 Divide your property's basis for depletion by total recoverable units. File an amendment Rate per unit. File an amendment 2 Multiply the rate per unit by units sold during the tax year. File an amendment Cost depletion deduction. File an amendment You must keep accounts for the depletion of each property and adjust these accounts each year for units sold and depletion claimed. File an amendment Elective safe harbor for owners of oil and gas property. File an amendment   Instead of using the method described earlier to determine the total recoverable units, you can use an elective safe harbor. File an amendment If you choose the elective safe harbor, the total recoverable units equal 105% of a property's proven reserves (both developed and undeveloped). File an amendment For details, see Revenue Procedure 2004-19 on page 563 of Internal Revenue Bulletin 2004-10, available at www. File an amendment irs. File an amendment gov/pub/irs-irbs/irb04-10. File an amendment pdf. File an amendment   To make the election, attach a statement to your timely filed (including extensions) original return for the first tax year for which the safe harbor is elected. File an amendment The statement must indicate that you are electing the safe harbor provided by Revenue Procedure 2004-19. File an amendment The election, if made, is effective for the tax year in which it is made and all later years. File an amendment It cannot be revoked for the tax year in which it is elected, but may be revoked in a later year. File an amendment Once revoked, it cannot be re-elected for the next 5 years. File an amendment Percentage Depletion To figure percentage depletion, you multiply a certain percentage, specified for each mineral, by your gross income from the property during the tax year. File an amendment The rates to be used and other rules for oil and gas wells are discussed later under Independent Producers and Royalty Owners and under Natural Gas Wells . File an amendment Rates and other rules for percentage depletion of other specific minerals are found later in Mines and Geothermal Deposits . File an amendment Gross income. File an amendment   When figuring percentage depletion, subtract from your gross income from the property the following amounts. File an amendment Any rents or royalties you paid or incurred for the property. File an amendment The part of any bonus you paid for a lease on the property allocable to the product sold (or that otherwise gives rise to gross income) for the tax year. File an amendment A bonus payment includes amounts you paid as a lessee to satisfy a production payment retained by the lessor. File an amendment   Use the following fraction to figure the part of the bonus you must subtract. File an amendment No. File an amendment of units sold in the tax year Recoverable units from the property × Bonus Payments For oil and gas wells and geothermal deposits, more information about the definition of gross income from the property is under Oil and Gas Wells , later. File an amendment For other property, more information about the definition of gross income from the property is under Mines and Geothermal Deposits , later. File an amendment Taxable income limit. File an amendment   The percentage depletion deduction generally cannot be more than 50% (100% for oil and gas property) of your taxable income from the property figured without the depletion deduction and the domestic production activities deduction. File an amendment   Taxable income from the property means gross income from the property minus all allowable deductions (except any deduction for depletion or domestic production activities) attributable to mining processes, including mining transportation. File an amendment These deductible items include, but are not limited to, the following. File an amendment Operating expenses. File an amendment Certain selling expenses. File an amendment Administrative and financial overhead. File an amendment Depreciation. File an amendment Intangible drilling and development costs. File an amendment Exploration and development expenditures. File an amendment Deductible taxes (see chapter 5), but not taxes that you capitalize or take as a credit. File an amendment Losses sustained. File an amendment   The following rules apply when figuring your taxable income from the property for purposes of the taxable income limit. File an amendment Do not deduct any net operating loss deduction from the gross income from the property. File an amendment Corporations do not deduct charitable contributions from the gross income from the property. File an amendment If, during the year, you dispose of an item of section 1245 property that was used in connection with mineral property, reduce any allowable deduction for mining expenses by the part of any gain you must report as ordinary income that is allocable to the mineral property. File an amendment See section 1. File an amendment 613-5(b)(1) of the regulations for information on how to figure the ordinary gain allocable to the property. File an amendment Oil and Gas Wells You cannot claim percentage depletion for an oil or gas well unless at least one of the following applies. File an amendment You are either an independent producer or a royalty owner. File an amendment The well produces natural gas that is either sold under a fixed contract or produced from geopressured brine. File an amendment If you are an independent producer or royalty owner, see Independent Producers and Royalty Owners , next. File an amendment For information on the depletion deduction for wells that produce natural gas that is either sold under a fixed contract or produced from geopressured brine, see Natural Gas Wells , later. File an amendment Independent Producers and Royalty Owners If you are an independent producer or royalty owner, you figure percentage depletion using a rate of 15% of the gross income from the property based on your average daily production of domestic crude oil or domestic natural gas up to your depletable oil or natural gas quantity. File an amendment However, certain refiners, as explained next, and certain retailers and transferees of proven oil and gas properties, as explained next, cannot claim percentage depletion. File an amendment For information on figuring the deduction, see Figuring percentage depletion , later. File an amendment Refiners who cannot claim percentage depletion. File an amendment   You cannot claim percentage depletion if you or a related person refine crude oil and you and the related person refined more than 75,000 barrels on any day during the tax year based on average (rather than actual) daily refinery runs for the tax year. File an amendment The average daily refinery run is computed by dividing total refinery runs for the tax year by the total number of days in the tax year. File an amendment Related person. File an amendment   You and another person are related persons if either of you holds a significant ownership interest in the other person or if a third person holds a significant ownership interest in both of you. File an amendment For example, a corporation, partnership, estate, or trust and anyone who holds a significant ownership interest in it are related persons. File an amendment A partnership and a trust are related persons if one person holds a significant ownership interest in each of them. File an amendment For purposes of the related person rules, significant ownership interest means direct or indirect ownership of 5% or more in any one of the following. File an amendment The value of the outstanding stock of a corporation. File an amendment The interest in the profits or capital of a partnership. File an amendment The beneficial interests in an estate or trust. File an amendment Any interest owned by or for a corporation, partnership, trust, or estate is considered to be owned directly both by itself and proportionately by its shareholders, partners, or beneficiaries. File an amendment Retailers who cannot claim percentage depletion. File an amendment   You cannot claim percentage depletion if both the following apply. File an amendment You sell oil or natural gas or their by-products directly or through a related person in any of the following situations. File an amendment Through a retail outlet operated by you or a related person. File an amendment To any person who is required under an agreement with you or a related person to use a trademark, trade name, or service mark or name owned by you or a related person in marketing or distributing oil, natural gas, or their by-products. File an amendment To any person given authority under an agreement with you or a related person to occupy any retail outlet owned, leased, or controlled by you or a related person. File an amendment The combined gross receipts from sales (not counting resales) of oil, natural gas, or their by-products by all retail outlets taken into account in (1) are more than $5 million for the tax year. File an amendment   For the purpose of determining if this rule applies, do not count the following. File an amendment Bulk sales (sales in very large quantities) of oil or natural gas to commercial or industrial users. File an amendment Bulk sales of aviation fuels to the Department of Defense. File an amendment Sales of oil or natural gas or their by-products outside the United States if none of your domestic production or that of a related person is exported during the tax year or the prior tax year. File an amendment Related person. File an amendment   To determine if you and another person are related persons, see Related person under Refiners who cannot claim percentage depletion, earlier. File an amendment Sales through a related person. File an amendment   You are considered to be selling through a related person if any sale by the related person produces gross income from which you may benefit because of your direct or indirect ownership interest in the person. File an amendment   You are not considered to be selling through a related person who is a retailer if all the following apply. File an amendment You do not have a significant ownership interest in the retailer. File an amendment You sell your production to persons who are not related to either you or the retailer. File an amendment The retailer does not buy oil or natural gas from your customers or persons related to your customers. File an amendment There are no arrangements for the retailer to acquire oil or natural gas you produced for resale or made available for purchase by the retailer. File an amendment Neither you nor the retailer knows of or controls the final disposition of the oil or natural gas you sold or the original source of the petroleum products the retailer acquired for resale. File an amendment Transferees who cannot claim percentage depletion. File an amendment   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. File an amendment For a definition of the term “transfer,” see section 1. File an amendment 613A-7(n) of the regulations. File an amendment For a definition of the term “interest in proven oil or gas property,” see section 1. File an amendment 613A-7(p) of the regulations. File an amendment Figuring percentage depletion. File an amendment   Generally, as an independent producer or royalty owner, you figure your percentage depletion by computing your average daily production of domestic oil or gas and comparing it to your depletable oil or gas quantity. File an amendment If your average daily production does not exceed your depletable oil or gas quantity, you figure your percentage depletion by multiplying the gross income from the oil or gas property (defined later) by 15%. File an amendment If your average daily production of domestic oil or gas exceeds your depletable oil or gas quantity, you must make an allocation as explained later under Average daily production. File an amendment   In addition, there is a limit on the percentage depletion deduction. File an amendment See Taxable income limit , later. File an amendment Average daily production. File an amendment   Figure your average daily production by dividing your total domestic production of oil or gas for the tax year by the number of days in your tax year. File an amendment Partial interest. File an amendment   If you have a partial interest in the production from a property, figure your share of the production by multiplying total production from the property by your percentage of interest in the revenues from the property. File an amendment   You have a partial interest in the production from a property if you have a net profits interest in the property. File an amendment To figure the share of production for your net profits interest, you must first determine your percentage participation (as measured by the net profits) in the gross revenue from the property. File an amendment To figure this percentage, you divide the income you receive for your net profits interest by the gross revenue from the property. File an amendment Then multiply the total production from the property by your percentage participation to figure your share of the production. File an amendment Example. File an amendment Javier Robles owns oil property in which Pablo Olmos owns a 20% net profits interest. File an amendment During the year, the property produced 10,000 barrels of oil, which Javier sold for $200,000. File an amendment Javier had expenses of $90,000 attributable to the property. File an amendment The property generated a net profit of $110,000 ($200,000 − $90,000). File an amendment Pablo received income of $22,000 ($110,000 × . File an amendment 20) for his net profits interest. File an amendment Pablo determined his percentage participation to be 11% by dividing $22,000 (the income he received) by $200,000 (the gross revenue from the property). File an amendment Pablo determined his share of the oil production to be 1,100 barrels (10,000 barrels × 11%). File an amendment Depletable oil or natural gas quantity. File an amendment   Generally, your depletable oil quantity is 1,000 barrels. File an amendment Your depletable natural gas quantity is 6,000 cubic feet multiplied by the number of barrels of your depletable oil quantity that you choose to apply. File an amendment If you claim depletion on both oil and natural gas, you must reduce your depletable oil quantity (1,000 barrels) by the number of barrels you use to figure your depletable natural gas quantity. File an amendment Example. File an amendment You have both oil and natural gas production. File an amendment To figure your depletable natural gas quantity, you choose to apply 360 barrels of your 1000-barrel depletable oil quantity. File an amendment Your depletable natural gas quantity is 2. File an amendment 16 million cubic feet of gas (360 × 6000). File an amendment You must reduce your depletable oil quantity to 640 barrels (1000 − 360). File an amendment If you have production from marginal wells, see section 613A(c)(6) of the Internal Revenue Code to figure your depletable oil or natural gas quantity. File an amendment Also, see Notice 2012-50, available at www. File an amendment irs. File an amendment gov/irb/2012–31_IRB/index. File an amendment html. File an amendment Business entities and family members. File an amendment   You must allocate the depletable oil or gas quantity among the following related persons in proportion to each entity's or family member's production of domestic oil or gas for the year. File an amendment Corporations, trusts, and estates if 50% or more of the beneficial interest is owned by the same or related persons (considering only persons that own at least 5% of the beneficial interest). File an amendment You and your spouse and minor children. File an amendment A related person is anyone mentioned in the related persons discussion under Nondeductible loss in chapter 2 of Publication 544, except that for purposes of this allocation, item (1) in that discussion includes only an individual, his or her spouse, and minor children. File an amendment Controlled group of corporations. File an amendment   Members of the same controlled group of corporations are treated as one taxpayer when figuring the depletable oil or natural gas quantity. File an amendment They share the depletable quantity. File an amendment A controlled group of corporations is defined in section 1563(a) of the Internal Revenue Code, except that, for this purpose, the stock ownership requirement in that definition is “more than 50%” rather than “at least 80%. File an amendment ” Gross income from the property. File an amendment   For purposes of percentage depletion, gross income from the property (in the case of oil and gas wells) is the amount you receive from the sale of the oil or gas in the immediate vicinity of the well. File an amendment If you do not sell the oil or gas on the property, but manufacture or convert it into a refined product before sale or transport it before sale, the gross income from the property is the representative market or field price (RMFP) of the oil or gas, before conversion or transportation. File an amendment   If you sold gas after you removed it from the premises for a price that is lower than the RMFP, determine gross income from the property for percentage depletion purposes without regard to the RMFP. File an amendment   Gross income from the property does not include lease bonuses, advance royalties, or other amounts payable without regard to production from the property. File an amendment Average daily production exceeds depletable quantities. File an amendment   If your average daily production for the year is more than your depletable oil or natural gas quantity, figure your allowance for depletion for each domestic oil or natural gas property as follows. File an amendment Figure your average daily production of oil or natural gas for the year. File an amendment Figure your depletable oil or natural gas quantity for the year. File an amendment Figure depletion for all oil or natural gas produced from the property using a percentage depletion rate of 15%. File an amendment Multiply the result figured in (3) by a fraction, the numerator of which is the result figured in (2) and the denominator of which is the result figured in (1). File an amendment This is your depletion allowance for that property for the year. File an amendment Taxable income limit. File an amendment   If you are an independent producer or royalty owner of oil and gas, your deduction for percentage depletion is limited to the smaller of the following. File an amendment 100% of your taxable income from the property figured without the deduction for depletion and the deduction for domestic production activities under section 199 of the Internal Revenue Code. File an amendment For a definition of taxable income from the property, see Taxable income limit , earlier, under Mineral Property. File an amendment 65% of your taxable income from all sources, figured without the depletion allowance, the deduction for domestic production activities, any net operating loss carryback, and any capital loss carryback. File an amendment You can carry over to the following year any amount you cannot deduct because of the 65%-of-taxable-income limit. File an amendment Add it to your depletion allowance (before applying any limits) for the following year. File an amendment Partnerships and S Corporations Generally, each partner or S corporation shareholder, and not the partnership or S corporation, figures the depletion allowance separately. File an amendment (However, see Electing large partnerships must figure depletion allowance , later. File an amendment ) Each partner or shareholder must decide whether to use cost or percentage depletion. File an amendment If a partner or shareholder uses percentage depletion, he or she must apply the 65%-of-taxable-income limit using his or her taxable income from all sources. File an amendment Partner's or shareholder's adjusted basis. File an amendment   The partnership or S corporation must allocate to each partner or shareholder his or her share of the adjusted basis of each oil or gas property held by the partnership or S corporation. File an amendment The partnership or S corporation makes the allocation as of the date it acquires the oil or gas property. File an amendment   Each partner's share of the adjusted basis of the oil or gas property generally is figured according to that partner's interest in partnership capital. File an amendment However, in some cases, it is figured according to the partner's interest in partnership income. File an amendment   The partnership or S corporation adjusts the partner's or shareholder's share of the adjusted basis of the oil and gas property for any capital expenditures made for the property and for any change in partnership or S corporation interests. File an amendment Recordkeeping. File an amendment Each partner or shareholder must separately keep records of his or her share of the adjusted basis in each oil and gas property of the partnership or S corporation. File an amendment The partner or shareholder must reduce his or her adjusted basis by the depletion allowed or allowable on the property each year. File an amendment The partner or shareholder must use that reduced adjusted basis to figure cost depletion or his or her gain or loss if the partnership or S corporation disposes of the property. File an amendment Reporting the deduction. File an amendment   Information that you, as a partner or shareholder, use to figure your depletion deduction on oil and gas properties is reported by the partnership or S corporation on Schedule K-1 (Form 1065) or on Schedule K-1 (Form 1120S). File an amendment Deduct oil and gas depletion for your partnership or S corporation interest on Schedule E (Form 1040). File an amendment The depletion deducted on Schedule E is included in figuring income or loss from rental real estate or royalty properties. File an amendment The instructions for Schedule E explain where to report this income or loss and whether you need to file either of the following forms. File an amendment Form 6198, At-Risk Limitations. File an amendment Form 8582, Passive Activity Loss Limitations. File an amendment Electing large partnerships must figure depletion allowance. File an amendment   An electing large partnership, rather than each partner, generally must figure the depletion allowance. File an amendment The partnership figures the depletion allowance without taking into account the 65-percent-of-taxable-income limit and the depletable oil or natural gas quantity. File an amendment Also, the adjusted basis of a partner's interest in the partnership is not affected by the depletion allowance. File an amendment   An electing large partnership is one that meets both the following requirements. File an amendment The partnership had 100 or more partners in the preceding year. File an amendment The partnership chooses to be an electing large partnership. File an amendment Disqualified persons. File an amendment   An electing large partnership does not figure the depletion allowance of its partners that are disqualified persons. File an amendment Disqualified persons must figure it themselves, as explained earlier. File an amendment   All the following are disqualified persons. File an amendment Refiners who cannot claim percentage depletion (discussed under Independent Producers and Royalty Owners , earlier). File an amendment Retailers who cannot claim percentage depletion (discussed under Independent Producers and Royalty Owners , earlier). File an amendment Any partner whose average daily production of domestic crude oil and natural gas is more than 500 barrels during the tax year in which the partnership tax year ends. File an amendment Average daily production is discussed earlier. File an amendment Natural Gas Wells You can use percentage depletion for a well that produces natural gas that is either Sold under a fixed contract, or Produced from geopressured brine. File an amendment Natural gas sold under a fixed contract. File an amendment   Natural gas sold under a fixed contract qualifies for a percentage depletion rate of 22%. File an amendment This is domestic natural gas sold by the producer under a contract that does not provide for a price increase to reflect any increase in the seller's tax liability because of the repeal of percentage depletion for gas. File an amendment The contract must have been in effect from February 1, 1975, until the date of sale of the gas. File an amendment Price increases after February 1, 1975, are presumed to take the increase in tax liability into account unless demonstrated otherwise by clear and convincing evidence. File an amendment Natural gas from geopressured brine. File an amendment   Qualified natural gas from geopressured brine is eligible for a percentage depletion rate of 10%. File an amendment This is natural gas that is both the following. File an amendment Produced from a well you began to drill after September 1978 and before 1984. File an amendment Determined in accordance with section 503 of the Natural Gas Policy Act of 1978 to be produced from geopressured brine. File an amendment Mines and Geothermal Deposits Certain mines, wells, and other natural deposits, including geothermal deposits, qualify for percentage depletion. File an amendment Mines and other natural deposits. File an amendment   For a natural deposit, the percentage of your gross income from the property that you can deduct as depletion depends on the type of deposit. File an amendment   The following is a list of the percentage depletion rates for the more common minerals. File an amendment DEPOSITS RATE Sulphur, uranium, and, if from deposits in the United States, asbestos, lead ore, zinc ore, nickel ore, and mica 22% Gold, silver, copper, iron ore, and certain oil shale, if from deposits in the United States 15% Borax, granite, limestone, marble, mollusk shells, potash, slate, soapstone, and carbon dioxide produced from a well 14% Coal, lignite, and sodium chloride 10% Clay and shale used or sold for use in making sewer pipe or bricks or used or sold for use as sintered or burned lightweight aggregates 7½% Clay used or sold for use in making drainage and roofing tile, flower pots, and kindred products, and gravel, sand, and stone (other than stone used or sold for use by a mine owner or operator as dimension or ornamental stone) 5%   You can find a complete list of minerals and their percentage depletion rates in section 613(b) of the Internal Revenue Code. File an amendment Corporate deduction for iron ore and coal. File an amendment   The percentage depletion deduction of a corporation for iron ore and coal (including lignite) is reduced by 20% of: The percentage depletion deduction for the tax year (figured without this reduction), minus The adjusted basis of the property at the close of the tax year (figured without the depletion deduction for the tax year). File an amendment Gross income from the property. File an amendment   For property other than a geothermal deposit or an oil or gas well, gross income from the property means the gross income from mining. File an amendment Mining includes all the following. File an amendment Extracting ores or minerals from the ground. File an amendment Applying certain treatment processes described later. File an amendment Transporting ores or minerals (generally, not more than 50 miles) from the point of extraction to the plants or mills in which the treatment processes are applied. File an amendment Excise tax. File an amendment   Gross income from mining includes the separately stated excise tax received by a mine operator from the sale of coal to compensate the operator for the excise tax the mine operator must pay to finance black lung benefits. File an amendment Extraction. File an amendment   Extracting ores or minerals from the ground includes extraction by mine owners or operators of ores or minerals from the waste or residue of prior mining. File an amendment This does not apply to extraction from waste or residue of prior mining by the purchaser of the waste or residue or the purchaser of the rights to extract ores or minerals from the waste or residue. File an amendment Treatment processes. File an amendment   The processes included as mining depend on the ore or mineral mined. File an amendment To qualify as mining, the treatment processes must be applied by the mine owner or operator. File an amendment For a listing of treatment processes considered as mining, see section 613(c)(4) of the Internal Revenue Code and the related regulations. File an amendment Transportation of more than 50 miles. File an amendment   If the IRS finds that the ore or mineral must be transported more than 50 miles to plants or mills to be treated because of physical and other requirements, the additional authorized transportation is considered mining and included in the computation of gross income from mining. File an amendment    If you wish to include transportation of more than 50 miles in the computation of gross income from mining, request an advance ruling from the IRS. File an amendment Include in the request the facts about the physical and other requirements that prevented the construction and operation of the plant within 50 miles of the point of extraction. File an amendment For more information about requesting an advance ruling, see Revenue Procedure 2013-1, available at www. File an amendment irs. File an amendment gov/irb/2013-01_IRB/ar11. File an amendment html. File an amendment Disposal of coal or iron ore. File an amendment   You cannot take a depletion deduction for coal (including lignite) or iron ore mined in the United States if both the following apply. File an amendment You disposed of it after holding it for more than 1 year. File an amendment You disposed of it under a contract under which you retain an economic interest in the coal or iron ore. File an amendment Treat any gain on the disposition as a capital gain. File an amendment Disposal to related person. File an amendment   This rule does not apply if you dispose of the coal or iron ore to one of the following persons. File an amendment A related person (as listed in chapter 2 of Publication 544). File an amendment A person owned or controlled by the same interests that own or control you. File an amendment Geothermal deposits. File an amendment   Geothermal deposits located in the United States or its possessions qualify for a percentage depletion rate of 15%. File an amendment A geothermal deposit is a geothermal reservoir of natural heat stored in rocks or in a watery liquid or vapor. File an amendment For percentage depletion purposes, a geothermal deposit is not considered a gas well. File an amendment   Figure gross income from the property for a geothermal steam well in the same way as for oil and gas wells. File an amendment See Gross income from the property , earlier, under Oil and Gas Wells. File an amendment Percentage depletion on a geothermal deposit cannot be more than 50% of your taxable income from the property. File an amendment Lessor's Gross Income In the case of leased property, the depletion deduction is divided between the lessor and the lessee. File an amendment A lessor's gross income from the property that qualifies for percentage depletion usually is the total of the royalties received from the lease. File an amendment Bonuses and advanced royalties. File an amendment   Bonuses and advanced royalties are payments a lessee makes before production to a lessor for the grant of rights in a lease or for minerals, gas, or oil to be extracted from leased property. File an amendment If you are the lessor, your income from bonuses and advanced royalties received is subject to an allowance for depletion, as explained in the next two paragraphs. File an amendment Figuring cost depletion. File an amendment   To figure cost depletion on a bonus, multiply your adjusted basis in the property by a fraction, the numerator of which is the bonus and the denominator of which is the total bonus and royalties expected to be received. File an amendment To figure cost depletion on advanced royalties, use the computation explained earlier under Cost Depletion , treating the number of units for which the advanced royalty is received as the number of units sold. File an amendment Figuring percentage depletion. File an amendment   In the case of mines, wells, and other natural deposits other than gas, oil, or geothermal property, you may use the percentage rates discussed earlier under Mines and Geothermal Deposits . File an amendment Any bonus or advanced royalty payments are generally part of the gross income from the property to which the rates are applied in making the calculation. File an amendment However, for oil, gas, or geothermal property, gross income does not include lease bonuses, advanced royalties, or other amounts payable without regard to production from the property. File an amendment Ending the lease. File an amendment   If you receive a bonus on a lease that ends or is abandoned before you derive any income from mineral extraction, include in income the depletion deduction you took. File an amendment Do this for the year the lease ends or is abandoned. File an amendment Also increase your adjusted basis in the property to restore the depletion deduction you previously subtracted. File an amendment   For advanced royalties, include in income the depletion claimed on minerals for which the advanced royalties were paid if the minerals were not produced before the lease ended. File an amendment Include this amount in income for the year the lease ends. File an amendment Increase your adjusted basis in the property by the amount you include in income. File an amendment Delay rentals. File an amendment   These are payments for deferring development of the property. File an amendment Since delay rentals are ordinary rent, they are ordinary income that is not subject to depletion. File an amendment These rentals can be avoided by either abandoning the lease, beginning development operations, or obtaining production. File an amendment Timber You can figure timber depletion only by the cost method. File an amendment Percentage depletion does not apply to timber. File an amendment Base your depletion on your cost or other basis in the timber. File an amendment Your cost does not include the cost of land or any amounts recoverable through depreciation. File an amendment Depletion takes place when you cut standing timber. File an amendment You can figure your depletion deduction when the quantity of cut timber is first accurately measured in the process of exploitation. File an amendment Figuring cost depletion. File an amendment   To figure your cost depletion allowance, you multiply the number of timber units cut by your depletion unit. File an amendment Timber units. File an amendment   When you acquire timber property, you must make an estimate of the quantity of marketable timber that exists on the property. File an amendment You measure the timber using board feet, log scale, cords, or other units. File an amendment If you later determine that you have more or less units of timber, you must adjust the original estimate. File an amendment   The term “timber property” means your economic interest in standing timber in each tract or block representing a separate timber account. File an amendment Depletion unit. File an amendment   You figure your depletion unit each year by taking the following steps. File an amendment Determine your cost or adjusted basis of the timber on hand at the beginning of the year. File an amendment Adjusted basis is defined under Cost Depletion in the discussion on Mineral Property. File an amendment Add to the amount determined in (1) the cost of any timber units acquired during the year and any additions to capital. File an amendment Figure the number of timber units to take into account by adding the number of timber units acquired during the year to the number of timber units on hand in the account at the beginning of the year and then adding (or subtracting) any correction to the estimate of the number of timber units remaining in the account. File an amendment Divide the result of (2) by the result of (3). File an amendment This is your depletion unit. File an amendment Example. File an amendment You bought a timber tract for $160,000 and the land was worth as much as the timber. File an amendment Your basis for the timber is $80,000. File an amendment Based on an estimated one million board feet (1,000 MBF) of standing timber, you figure your depletion unit to be $80 per MBF ($80,000 ÷ 1,000). File an amendment If you cut 500 MBF of timber, your depletion allowance would be $40,000 (500 MBF × $80). File an amendment When to claim depletion. File an amendment   Claim your depletion allowance as a deduction in the year of sale or other disposition of the products cut from the timber, unless you choose to treat the cutting of timber as a sale or exchange (explained below). File an amendment Include allowable depletion for timber products not sold during the tax year the timber is cut as a cost item in the closing inventory of timber products for the year. File an amendment The inventory is your basis for determining gain or loss in the tax year you sell the timber products. File an amendment Example. File an amendment The facts are the same as in the previous example except that you sold only half of the timber products in the cutting year. File an amendment You would deduct $20,000 of the $40,000 depletion that year. File an amendment You would add the remaining $20,000 depletion to your closing inventory of timber products. File an amendment Electing to treat the cutting of timber as a sale or exchange. File an amendment   You can elect, under certain circumstances, to treat the cutting of timber held for more than 1 year as a sale or exchange. File an amendment You must make the election on your income tax return for the tax year to which it applies. File an amendment If you make this election, subtract the adjusted basis for depletion from the fair market value of the timber on the first day of the tax year in which you cut it to figure the gain or loss on the cutting. File an amendment You generally report the gain as long-term capital gain. File an amendment The fair market value then becomes your basis for figuring your ordinary gain or loss on the sale or other disposition of the products cut from the timber. File an amendment For more information, see Timber in chapter 2 of Publication 544, Sales and Other Dispositions of Assets. File an amendment   You may revoke an election to treat the cutting of timber as a sale or exchange without IRS's consent. File an amendment The prior election (and revocation) is disregarded for purposes of making a subsequent election. File an amendment See Form T (Timber), Forest Activities Schedule, for more information. File an amendment Form T. File an amendment   Complete and attach Form T (Timber) to your income tax return if you claim a deduction for timber depletion, choose to treat the cutting of timber as a sale or exchange, or make an outright sale of timber. File an amendment Prev  Up  Next   Home   More Online Publications