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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 6170
Experience:  Extensive Experience with Tax, Financial & Estate Issues
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I'm a CPA in public practice and I'm preparing OIl and Gas

Customer Question

I'm a CPA in public practice and I'm preparing OIl and Gas Partnership returns. How does the partnership report on a K-1 the allocation of the adjusted basis of each oil and gas property?
Submitted: 1 year ago.
Category: Tax
Expert:  Stephen G. replied 1 year ago.
Hello, my name is***** & I'll be helping you today. My goal is to give you a complete & accurate answer that you can understand.
Depending upon the number of properties, you would either enter the basis information in Item 20 on the K-1, or Indicate in Item 20 that you have attached a schedule with the information.
From the 1065 instructions:
Attached statements. The partnership will
enter an asterisk (*) after the code, if any, in
the column to the left of the dollar amount
entry space for each item for which it has
attached a statement providing additional
information.
For those informational items
that cannot be reported as a single dollar
amount, the partnership will enter an asterisk
in the left column and enter “STMT” in the
dollar amount entry space to indicate the
information is provided on an attached
statement.
For Item 20, for Depletion information/ Basis of each Oil & Gas property, you would use Code "T":
From the Instructions:
"Code T. Depletion information—oil and gas. This is your share of gross income from the property, share of production for the tax year, etc., needed to figure your depletion deduction for oil and gas wells.
The partnership should also allocate to you a share of the adjusted basis of each partnership oil or gas property.
See Pub. 535 for details on how to figure your depletion deduction."
Does that answer your question or are you asking for something different?
.
Expert:  Stephen G. replied 1 year ago.
Please remember to rate my response as that is the only way I receive credit for my work.
Thanks very much.