We pay some property taxes on behalf of royalty owners. We use expense class 1 for items like gatherer charges which should be charged to royalty owners but we have not set that up on but a few wells. Is another way to handle the taxes by entering a suspense balance?

The Class 1 method is the cleanest and easiest method, as it requires just making a single entry for the entire well for those taxes, instead of making an entry for each owner in every well.

To set up each well with a class 1 that contains the royalty owners is a pretty easy process. Use the Utilities > Division of Interest Utilities > Copy Division of Interests screen to do this. On that screen, you can choose to copy either oil or gas revenue to the Class 1 expense class, which will give all royalty owners in the well a share of those class 1 expenses that you enter.

Just repeat that copy step for each of your wells, and then you can use class 1 for all your property taxes, and they'll be allocated to all owners in the well.

Top

Return to Taxes