Useful tax info
SWAPO2 Neighborhood Rights
Useful Tax Links
[Posted March 31, 2009]
By now, most of you have received a 1099-MISC tax form regarding your bonus payment from Carburante. We get a lot of questions about this form, and to get the most expert opinion, we refer you to the excellent reporting on this subject by the Fort Worth Star-Telegram, where CPAs have been interviewed. Visit these links to learn more about gas-lease bonus rents and royalties:
Savvy Consumer Column by Teresa McUsic
We cannot recommend a course of action or give legal or accounting advice; however, it is our understanding from these documents that whether a gas-lease bonus check is classified as rent or royalty, it is classified as INCOME and not as capital gains. Some royalties are treated as capital gains, but these are either outside the mineral sphere or relate to depletion, which has not yet begun when the bonus is received. Again, read the above documents carefully and check with your own accountant and/or attorney.
If you really like complex documents, check out IRS documents relating to royalties and rentals:
IRS Publication 535, Business Expenses