Introduction to Oil and Gas Transactions: Tax Considerations
This course provides an overview and in-depth look of Oil and Gas Federal Income Tax procedures and process. Designed for petroleum new and experienced employees, and service providers involved in Petroleum accounting and industry. Additionally, this course is for those who work in the Oil and Gas Federal tax arena and want to expand their understanding the laws, processes, and procedures used.
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