Section 1254 Property Definition

That seems very broad and nondescript.

Section 1254 property definition. In the case of the disposition of an undivided interest in a section 1254 property or a portion thereof a proportionate part of the expenditures or deductions described in paragraph 1 a with respect to such property shall be treated as allocable to such undivided interest to the extent of the amount of the gain to which paragraph 1 applies. That seems very nebulous and even more nondescript. 1254 recapture rules example 1 houco drilled its first well on the bauer property in the permian basin in 1985 and drilled multiple wells on it through 2006.

Section 1254 property includes intangible drilling and development costs exploration costs and costs for developing mining operations. Digging further we learn that property is defined as each separate interest owned in a mineral in each separate parcel of land. 1254 a 3 b.

The internal revenue code includes multiple classifications for property. 1254 a 3 a any expenditures described in paragraph 1 a are properly chargeable to such property or i r c. The term section 1254 property means any property within the meaning of section 614 if a any expenditures described in paragraph 1 a are properly chargeable to such property or b the adjusted basis of such property includes adjustments for deductions for depletion under section 611.

Section 1254 property is oil and gas geothermal or other minerals properties. Section 1252 property which is farmland held less than 10 years on which soil water or land clearing expenses were deducted section 1254 property including intangible drilling and development costs exploration costs and costs for developing mining operations. The term section 1254 property means any property within the meaning of section 614 that is placed in service by the taxpayer after december 31 1986 if any expenditures described in paragraph b 1 i a of this section relating to costs under section 263 616 or 617 are properly chargeable to such property or if the adjusted basis of such property includes adjustments for deductions for depletion under section 611.

Houco incurred 20 000 000 in idcs to drill on the property and paid leasehold costs. Learn about 1231 1245 1250 property and its treatment for gains and losses.