Reporting partnership K-1 oil and gas depletion in Lacerte for Schedule E

Follow these steps to enter oil and gas depletion:

1. Go to Screen 20, Passthrough K-1's.
2. In the Passthrough K-1's list, select the activity type.
3. Select Oil & Gas in the section list.
4. Enter the depletion associated with the activity.
5. Enter 1 in 1 = report depletion on Schedule E, page 1 (royalty).

Starting in tax year 2024, California law does not allow the IRC Section 263(c) deduction for intangible drilling and development costs in the case of oil and gas wells paid or incurred on or after January 1, 2024. Also, California no longer allows the calculation of depletion as a percentage of gross income from the property for specified natural resources, including coal, oil shale, oil and gas wells. Cost Depletion must be used.

Related topics

• Entering oil and gas information
• Understanding how Lacerte calculates the oil and gas depletion deduction