In this report the authors address many difficult issues that arise from the statutory directive of section 613A(c)(7)(D), which requires the partners of a partnership holding an oil and gas property to separately compute depletion. Included is a discussion of how tax basis is initially allocated among the partners, how subsequent transactions affect prior basis allocations, capital account maintenance under section 704(b), and the interface of section 613A(c)(7)(D) with section 704(c).
Tax Notes, Vol. 108, No. 13, September 19, 2005