This regulation prescribes rules for
determining the tax treatment of gain from the disposition of
natural resource recapture property in accordance with Internal
Revenue Code section 1254. Gain is treated as ordinary income in an
amount equal to the intangible drilling and development costs and
depletion deductions taken with respect to the property. The
information that taxpayers are required to retain will be used by
the IRS to determine whether a taxpayer has properly characterized
gain on the disposition of section 1254 property.
US Code:
26
USC 1254 Name of Law: Gain from disposition of interest in oil,
gas, geothermal, or other mineral properties
US Code: 26
USC 6103 Name of Law: Confidentiality and disclosure of returns
and return information
On behalf of this Federal agency, I certify that
the collection of information encompassed by this request complies
with 5 CFR 1320.9 and the related provisions of 5 CFR
1320.8(b)(3).
The following is a summary of the topics, regarding
the proposed collection of information, that the certification
covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a
benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control
number;
If you are unable to certify compliance with any of
these provisions, identify the item by leaving the box unchecked
and explain the reason in the Supporting Statement.