Off to the CPA.
February 11th, 2007 by Grant in: Business, Oil & Gas, TaxesYesterday, I spent the entire morning and a couple hours into the afternoon organizing our taxes.
I separated everything we have into three groups:
- The Oil Company
- The Rental Property
- Personal Taxes
Note that since the oil company is an S-corp and the rental unit is not held in a corporation, both of them funnel into our own personal tax return.
I organized everything in a “Summary Report” listing all the major activities, and adding up all costs for each possible category. In effect, there should be no reason for my CPA to even whip out his calculator.
On my first year, I’m showing about a $3,000 loss for the rental property due to the costs to rehab the house. However, some of these costs will be amatorized over the life of the house, while the rest will be applied to this years’ tax return.
Next year will be much better, as I won’t have those initial repair and upgrade expenses.
As for the oil company, the full (8/8) interest produced over 10,000 barrels last year, and just under 14,000 MCF of gas. Overall margin for the operation is about 20%, which should get larger as we continue to develop the field.
Hopefully we’ll be getting money back this year, afterall, we paid just under $3,000 in estimated taxes for 2005 on $7,000 of stock gains that wasn’t taxed. In 2006 we moved most of our major stock activity into Roth IRA accounts, which should alleviate us from paying taxes on gains. In short, we hope to not have to pay estimated taxes in 2007.
Monday I’ll call the CPA and set up an appointment to discuss our tax preparations.
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