I could not do the K-i using H&R block software so I went to an accountant. He said it is passive income in box 1 so I can only deduct the box 13 intangible drilling costs up to the amount of income in box 1 which leads me a passive expense carry over of the unused intangible drilling costs. Also the box 20 which is supplemental information list depletion which the accountant didn't use. Can someone explain, Is the K-1 LINE box 1 a passive activity? and do I get to deduct depletion costs from box 20 T supplemental information?
Yes, it is passive and excess losses carried forward. Accountant correct on that point.
You should claim depletion and it will be a significant amount. Ike the 13J it will be carried forward if exceeds box 1, however you will eventually be able to use it (at latest when you sell), so in this case your accountant is wrong and is costing you money.
Thank you Rip. If the amounts on 13J and 20T1 or 20T2 are more than the income in box 1( mine are by 2000) are they deducted to get a negative number reducing my taxable income amount or is this passive income and passive expenses which means the expenses in box 13 and 20 can only be deducted up to the income which is box 1?