Updating 907 keys
The term "immediate vicinity of the well" would have a meaning for IRC § 907 that is substantially identical to the meaning for depletion.Accordingly, FOGEI is the value of minerals at the bounds of the premises. §1.907(c)-1(d)(4) defines primary product from oil as all products derived from the processing of crude oil, including volatile products, light oils (such as motor fuel and kerosene), distillates (such as naphtha), lubricating oils, greases and waxes, and residues (such as fuel oil). §1.907(c)-1(d)(2) defines "transportation" as Thus an extremely literal view of transportation would question the correctness of treating flowlines and interconnecting lines as FOGEI assets, as is done in the text of this LMSB Directive.Examples of FOGEI assets include: Most of the disagreements regarding classification of assets between FOGEI and FORI involve transportation and processing assets. Not defined in IRC § 907 or the regulations under that section.Attachment 1 provides a more detailed discussion of the classification of those assets as FOGEI or FORI based on definitions provided in the regulations and on common usage of terms within the oil and gas industry. §1.907(c)-1(b)(1) as: [T]axable income (or loss) derived from sources outside the United States and its possessions from the extraction (by the taxpayer or any other person) of minerals from oil or gas wells located outside the United States and its possessions or from the sale or exchange of assets used by the taxpayer in the trade or business of extracting those minerals. However, the term has been used for many decades for determining gross depletable income for purposes of depletion: Treas. §1.613-3 Gross income from the property--Oil and gas wells.Der Vorgang für die Einrichtung der zweistufigen Authentifizierung muss nur auf deinem ersten Gerät vollständig durchgeführt werden.Auf allen anderen Geräten kann der Instagram-Schlüssel, der von deinem ersten Gerät aus erzeugt wurde, in die Authentifizierungs-App eingefügt und dein Instagram-Konto damit verknüpft werden.ALERT: Contacts for this Directives has been updated.Questions about this directive should be directed to FTC Management (IBC) PN, Cindy Kim or DCE PN, Louis Elizondo at or Petroleum Industry, Robert Mc Cann.
Because income from the production and sale of oil and gas product is equal to the sum of FOGEI and FORI, once the total income and FORI are established, FOGEI can then be determined by subtracting FORI from total income.Both of those methods, as well as other methods, are acceptable when applied reasonably and in a manner consistent with the regulations.For example, when comparable costs of transportation or processing are available, taxpayers and IEs may be able to estimate the value of FOGEI through netback adjustments to the sales price of the oil or gas. FOGEI is determined under the residual (rate of return) method by first calculating FORI and subtracting FORI from the total income from the production and sale of the oil or gas product.ATTACHMENT Attachment 1: Discussion of Classification of Assets as FOGEI or FORI Meaning of Extraction for IRC § 907 and the regulations: A key to interpreting the IRC § 907 regulations is to understand the full meaning of certain terms and phrases: FOGEI. In the case of oil and gas wells, "gross income from the property", as used in IRC § 613(c)(1), means the amount for which the taxpayer sells the oil or gas in the immediate vicinity of the well.
If the oil or gas is not sold on the premises but is manufactured or converted into a refined product prior to sale, or is transported from the premises prior to sale, the gross income from the property shall be assumed to be equivalent to the representative market or field price of the oil or gas before conversion or transportation.In all cases, the IE should estimate the tax effect of potential changes before expanding the examination time to permit consultation with engineers and economists. FOGEI is determined under the proportionate profits method by allocating total income from the production and sale of the oil or gas product between FOGEI and FORI based on the relative costs of the FOGEI and FORI activities.