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The oil depletion allowance in American (US) tax law is a tax break claimable by anyone with an economic interest in a mineral deposit or standing timber. [citation needed] The principle is that the asset is a capital investment that is a wasting asset, and therefore depreciation can reasonably be offset (effectively as a capital loss) against income.
Also, mine life and royalty expiration dates need to be taken into consideration. The royalty can be called a Net Value Royalty when deductions are based solely on the contract. [1] Alternatively the Gross Smelter Return is a percentage of gross revenue paid by mine owner that isn't subject to any deductions. [1]
Whether or not the operator can deduct costs of treating, transporting, or marketing the oil and gas, if not specified in the lease, has been a matter of legal dispute. The traditional royalty rate for oil and gas in the United States was one-eighth (12.5 percent), although today it is often higher.
Income earned as an independent contractor is typically reported with the contractor’s Form 1040 on a Schedule C. The total amount of all income reported on Form 1099-NEC, which has replaced ...
A royalty payment is a payment made by one party to another that owns a particular asset, for the right to ongoing use of that asset. Royalties are typically agreed upon as a percentage of gross or net revenues derived from the use of an asset or a fixed price per unit sold of an item of such, but there are also other modes and metrics of compensation.
The 25-year-old independent contractor and startup founder says she made $100,000 last year — and owes $26,000 in taxes. Nearly $18,000 of that amount goes to the federal government, while the ...
When tackling your taxes, it can sometimes be hard to figure out whether to opt for a standard deduction or itemize. According to tax pros, itemizing generally only makes sense if your itemized ...
Tax Reduction Act of 1975; Long title: An act to amend the Internal Revenue Code of 1954 to provide for a refund of 1974 individual income taxes, to increase the low income allowance and the percentage standard deduction, to provide a credit for personal exemptions and a credit for certain earned income, to increase the investment credit and the surtax exemption, to reduce percentage depletion ...