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Mel7777
Level 4
June 30, 2026
Question

Reporting depletion on a K-1 for oil and drilling

  • June 30, 2026
  • 1 reply
  • 17 views

Hello!  This is a new one for me… client’s first K-1 for an investment in an energy drilling fund.  The K-1 has SE income and the K-1 notes a depletion amount.  Is it accurate that the SE income noted in box 14 should be reduced by the depletion?  

      1 reply

      T
      Terry53029Intuit Community Champion
      Intuit Community Champion
      June 30, 2026

      Yes, for oil and gas you can deduct 15% on 1040 schedule E even after you have recovered your purchase price. You can also use cost depletion, but once your cost is recovered you stop the deduction. I have always used the 15%, as it has always been better for the clients I have done it for

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