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Bonus payments do not qualify for percentage depletion deductions. However, other related lease expenses such as attorney fees, land surveying, deed or title work, and property taxes are deductible in the year they occur. The commission if paid from your bonus and shown on your 1099MISC is deductible.
The 1099 will come from the Oil Company. I paid an independent agent from the proceeds of the bonus payment and have a receipt. The commission will not be reflected on the 1099. Do these facts affect the deductiblity of the commission?
Thanks, XXXXX XXXXX
No this does not make a difference.