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CCH Axcess Tax

Schedule K-1 Depletion Information

If the taxpayer received depletion income, deductions and/or tax preference distributions on a Schedule K-1 from another entity, there are three ways to submit depletion information.

Single Property Method on Interview Forms K-1 and K-4

Enter depletion information in the "Oil and Gas Depletion" section of Interview Form K-4, being sure to enter a unique Property Number. Enter the ordinary income and other information on Interview Form K-1. Do not use Interview Form E-8.

When using Interview Form IRS-K1 (1065) or IRS-K1 (1120S), enter depletion information in the "Oil and Gas Depletion" section, being sure to enter a unique Property Number. Enter the ordinary income and other information in the other sections of Interview Form IRS-K1 (1065) or IRS-K1 (1120S). Do not use Interview Form E-8.

All calculations and limitations for percentage and cost depletion and related tax preference items are performed.

Use this method if there is income and depletion information on a Schedule K-1 received from a passthrough entity. This method can be used for more than one property by adding the income and expenses from all properties and entering these amounts as one amount.

Single Property Method on Interview Forms K-1 and E-8

Enter all information (except depletion information) from Schedule K-1 on Interview Form K-1. Do not enter any depletion information on Interview Form K-4. Enter the Activity Number from Interview Form K-1 on Interview Form E-8 in the "Passthrough Activity Number" box. Enter all depletion information on Interview Forms E-8, DP-1, DP-2 and DP-3.

When using Interview Form IRS-K1 (1065) or IRS-K1 (1120S), enter all information (except depletion information) from Schedule K-1 on Interview Form IRS-K1 (1065) or (1120S). Do not enter any depletion information in the "Oil and Gas Depletion" section. Enter the Activity Number from Interview Form IRS-K1 in the "Passthrough Activity Number" box. Enter all depletion information on Interview Forms E-8, DP-1, DP-2 and DP-3.

Use this method if there is income and depletion information on a Schedule K-1 received from a passthrough entity and a complete depletion statement is desired. Schedule E, Form 4562, and a depletion statement supporting Schedule E are prepared from these entries.

Multiple Property Method on Interview Forms K-1 and E-8

Enter all information (except depletion information) from Schedule K-1 on Interview Form K-1. Do not enter any depletion information on Interview Form K-4. Enter the Activity Number from Interview Form K-1 on Interview Form E-8 in the "Passthrough Activity Number" box. Enter the multiple properties and all other depletion information on Interview Forms E-8, DP-1, DP-2 and DP-3.

When using Interview Form IRS-K1 (1065) or IRS-K1 (1120S), enter all information (except depletion information) from Schedule K-1 on Interview Form IRS-K1 (1065) or IRS-K1 (1120S). Do not enter any depletion information in the "Oil and Gas Depletion" section. Enter the Activity Number from Interview Form IRS-K1 on Interview Form E-8 in the "Passthrough Activity Number" box. Enter the multiple properties and all other depletion information on Interview Forms E-8, DP-1, DP-2 and DP-3.

Use this method if there are multiple depletion properties on the Schedule K-1. Schedule E, Form 4562, and a depletion statement

supporting Schedule E are prepared from these entries.

When submitting Interview Form E-8, enter income and expenses related

to depletion on Interview Form E-8, not on Interview Form K-1 or IRS-K1. Income and expenses entered on Interview Form K-1 or IRS-K1 are added to the entries on Interview Form E-8, but are not included in the depletion statement computations for net income from oil and gas.