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

Follow these steps to enter oil and gas depletion:

1. From the Input Return tab, go to Income ⮕ Passthrough K-1's.
2. Select the applicable Passthrough K-1 from the drop down. 
3. Select the Lines 11-20 (1065), Lines 11-17 (1120S), or Lines 9-14 (1041) tab at the top of the screen.
4. Scroll down to the Oil & Gas section. 
5. Enter the depletion associated with the activity.
6. 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.