Description
Course Content
This course covers the following topics:
- Oil and Gas Interest
- Different Types
- Pool of Capital Theory (Palmer v. Bender)
- Economic Interest and Basic Rules in GCM 22730
- Oil and Gas Leases and Leaseholds
- Tax Consequences of leasing transactions (Bonus, Delay Rentals, Royalty Advances)
- Production Payment Consequences
- Leasehold Costs
- Federal Oil and Gas Taxes: Finding Oil
- Pre-drilling Exploration Costs
- Treatment of Geological and Geophysical Costs
- Domestic and Foreign Activities
- Intangible Drilling Costs
- Deductions – Partnerships
- Limitations
- Cost Recovery – Depletion
- Policy Role
- Cost and Percentage Depletion
- Property Dispositions and Recapture
- Depreciation of Equipment – Tax treatment (Sale vs Exchange, Recapture, Like in Kind Exchanges)
- Tax Rates
- Accidental Partnership: Entity Choice and Joint Operations
- Legal and Tax Differences (C Corp, S Corp, LLC, Partnership)
- Joint Operating Agreements (JOA)
- Selected Topics
- AMT
- Abandonment
- Net Income Investment Tax
Learning Objectives
Upon completion of this course, you will be able to:
- Explain the federal income tax implications of oil and gas transactions
- Illustrate and explain the impact that taxes have on oil and gas operations
- Model and calculate taxable income, accounting for available deductions and costs
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