Can someone answer this nuance of Oklahoma percentage depletion wording..."...depletion on oil and gas well production, at the option of the taxpayer, may be computed at 22% of the gross income derived from each Oklahoma property during the taxable year...any depletion deduction allowable is the amount so computed minus Federal depletion claimed." So, if the federal depletion percentage deduction is (always) 15%, would the allowable percentage depletion for Oklahoma be only 7% ?? I actually called the Oklahoma Tax Commission on this point and they said "no, it's 22%." This wording is very confusing and unclear. For years I've claimed 22% for Oklahoma returns, and 15% for Federal returns with no kickbacks. Can somebody explain the wording on this point, please.
When I use Turbo Tax it asks for the 7% difference between the federal depletion and the Oklahoma depletion. If you are bringing your “taxable” income over from your federal return, the 15% depletion has already been deducted. On your Oklahoma return, you are deducting an additional 7%.
I use the Non-resident OK TAX Form 513NR and on line 15
It asks for OK Depletion : I use 22% amounts in both the Col A and Col B ....
In other words all of my OK 22% Depletion comes from OK... Sounds obvious but
I think that's what they mean...
I hate to add to the confusion but I called the OK Tax Commission yesterday about my 2016 Non-resident 511NR. And they told me for for Additional Depletion Line 8 on 511NR-B ( Okla Subtractions ) to put the 15% (actual Fed amount) in Col A and 7% ( The OK Additional ) in Column B. Which is different that I have done before. Last year (2015) I put 22% in both columns, and the year before ( 2014) also 22% in both A and B. ( which were accepted - so far anyway ).
I also used TurboTax and it puts 22% in Col A and 7% in Col B...... ( but I am getting these amounts from K-1's which may be incorrect )
April -- what did you put in Col A and B ?
So, I am still confused...
Think I will call again next week !?!?
Well, after a review it looks like one puts the 7% in the Federal Column and the OK proportion of that in the OK column ( if all OKla Oil and Gas revenue then the same 7% number )...
But it's not clear .....................????
Hi Bud, When I first replied in 2013 I was an Oklahoma resident. Now I’m out of state and working with the same form as you are, and I agree it’s horribly obtuse. I haven’t gotten that far with my taxes yet, but I’ll definitely try to figure it out. Your last comment about putting 7% in the federal column doesn’t make sense to me. The basic concept is that the Feds give you a 15% depletion deduction, and Oklahoma gives you an additional 7% on top of that. We just need to figure out how to make that happen.
The reason I say 7% for the Federal is that Sch 511NR-1 Line 11 on my return has a number that is already reduced by 15%. So, I am thinking they want you to reduce it 7% more for Fed ( which they say is allowable ( this is where it gets confusing )). So, the " additional amounts" Fed and OK would be the same ????
I have a call into OTC -- more in a bit ( maybe )
OK-- Talked to OTC -- they say in my case where all my Royalties come from OK both the Fed and OK numbers will be the same 7% of the Gross Amount. This is because the Fed and Ok amounts on Sch511NR-1 line 11 have already been reduced by 15%. And this Row is to subtract the "Additional 7% OK Depletion" which is allowed for both Fed and OK.