| Drilling and Exploration Costs |
|
| The costs of developing oil, gas, or geothermal wells include wages, fuel, repairs, hauling, and supplies incident to and necessary for the preparation of the wells. A taxpayer who is developing these wells in the United States has the choice of treating the costs as capital expenditures and recovering them through depreciation or depletion or deducting the costs as current business expenses. If the costs of determining the existence, location, extent, or quality of any mineral deposit lead to the development of a mine, they are usually treated as capital expenditures and recovered through depletion as the mineral is removed from the ground. However, the taxpayer can choose to deduct exploration costs in the United States paid or incurred before the development stage began. This rule does not apply to oil, gas, or geothermal wells.
More... |
|
|
| Deductibility of Business Gifts |
|
| It is a common business practice to give gifts to customers and clients as a way of saying thank you for their patronage and to encourage future business. However, the taxpayer giving these gifts must be aware that certain tax laws limit the deductibility of these gifts. More... |
|
|
| Federal Payment Levy Program |
|
| If you have not paid all of your federal income taxes, beware. The Internal Revenue Service has partnered up with the Department of the Treasury, Financial Management Service (FMS), to create a program that is authorized to collect overdue taxes through a continuous levy on certain federal payments owed to you. More... |
|
|
| Valuation of Inventories |
|
| An inventory is an itemized list of goods held for sale or for consumption in a manufacturing or merchandising business. In order to properly calculate gross profit from operations, leading to a determination of taxable income for that business, the taxpayer must adopt a method of valuing its inventory. More... |
|
|
| Community Property Rules |
|
| The issue of community property rights is usually only relevant when a married couple decides to file separate income tax returns. Joint filers have no need to distinguish between community and separate income because all income is reported on a single tax return. There are currently nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Under the laws of these states, one half of the income and property earned and acquired by spouses during their marriage is generally deemed to belong to each spouse, no matter in whose name the legal title is held. More... |
|
|