- NY Credits : 7.0
- TX Credits : 7.0
This course focuses on the development of in-depth knowledge, skill and application of oil and gas taxation. Topics include lease payments, property interests, unit of property, pre-drilling exploration costs, and intangible drilling and development costs (IDC). The course covers depreciation, percentage depletion, certain proven property transfers, as well as the 65-percent taxable income limitation. Topics also include classification of transactions as a lease, sublease, or sale, proper tax accounting for payments received by a grantor and payments made by a grantee including an examination of all elements involved in the conveyance, the application of the pool of capital doctrine, sharing arrangements, carried interests, and property interests received for the performance of certain services. Finally, this course describes the unitization of property and planning ideas to minimize the current tax liability resulting from the unitization of oil properties.
Upon successful completion of this course, the user should be able to:
recognize the tax consequences related to the acquisition of mineral properties, royalty interest and the working or operating interest,
identify a unit of property and the tax treatment of pre-drilling exploration costs,
identify intangible drilling and development costs and how to apply the IDC deduction,
recognize how to compute depreciation, cost depletion, and percentage depletion,
recognize the depletion rules as they apply to related parties and apply the 65% taxable income limitation,
recognize a sublease and determine the tax treatment of lease payments,
identify the issues related to sales of working interests,
identify the treatment for production payments as economic interests, sharing arrangements and carried interest transactions, and
identify other aspects of sharing arrangements including carried interests and unitizations.