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Screen OGWell - Oil and Gas Well Information (1041)

General Information

State in which well is physically located
Enter the state postal code for the well’s location. For those clients with wells in multiple states, the Oil & Gas module categorizes the reports by state.
Number of months in production
If the production is less than 12 months, enter the period of production in this field. The number of months in production is a factor in calculating the amortization rate, which may aid in calculating the excess IDC preference.

Lease Income and Expenses

Lease expenses: Allocated overhead (Force)
The share of overhead you enter in the
Cost center
field for each well calculates automatically. If you want to change the overhead amount in the well net income calculation, enter the different amount in this field. The Other expenses statement on Schedule C or E includes the overhead.
Intangible drilling costs: Excess IDC amortization rate (Force)
The excess IDC amortization rate is automatically calculated by dividing the number of months in production by 120. The excess IDC preference adjustment calculates using the greater of either the amortization rate or cost depletion rate. Enter a percent in this field to override the calculated rate.

Percentage Depletion

Regular tax depletion carryover
The amount you enter should not exceed 65-percent of taxable income, including other percentage depletion deductions. If cost depletion is greater than percentage depletion for a well with a carryover, the carryover is still allowed as long as the carryover passes the 65-percent of taxable income limitation.
Alternative minimum tax depletion carryover
The amount you enter should not exceed 65-percent of the AMT income, including other percentage depletion deductions. If the cost depletion is greater than the percentage depletion for a well with a carryover, the carryover is still allowed as long as the carryover passes the 65-percent of AMT income limitation.

Depreciation

Regular tax (Force)
The depreciation amounts you enter do not show on Schedule C or E, Page 1. If you force an amount on a well schedule, you must also open the corresponding Schedule C or Schedule E input screen to force the depreciation amount.

Cost Depletion

Leasehold cost or other basis
Enter an amount here to use the alternate cost depletion method. The amount you enter becomes the starting point for calculating the cost depletion deduction. Leave this field blank to avoid using the alternate cost depletion method.
Accumulated depletion
The amount you enter is subtracted from the leasehold cost to determine the cost depletion deduction. The cost depletion deduction automatically limits to the adjusted basis (leasehold cost less accumulated depletion).
AMT accumulated depletion, if different from regular tax accumulated depletion
The amount you enter is subtracted from the leasehold cost to determine the AMT cost depletion deduction. The AMT cost depletion deduction automatically limits to the adjusted basis (leasehold cost less accumulated depletion).
Beginning reserves in barrels
You can calculate cost depletion by entering a number in the
Expected production life of well / lease
 field and an amount in the
Average price per barrel in the current year
 field when either the beginning reserves amount or the calculated accumulated depletion amount is unknown.
Current year production in barrels
You can calculate cost depletion by entering a number in the
Expected production life of well / lease
 field and an amount in the
Average price per barrel in the current year
 field when either the beginning reserves amount or the calculated accumulated depletion amount is unknown.
Cost depletion deduction (Force)
Enter an amount here to force a comparison between that amount and the calculated percentage depletion deduction in order to determine the greater of the two. The cost depletion deduction is not limited to adjusted basis (leasehold cost less accumulated depletion) if you force it using this field.

This article applies to:

  • Product: UltraTax CS
  • Return type: 1041 Fiduciary
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