Form 8924 Excise Tax on Certain Transfers of Qualifying Geothermal

8924

Excise Tax on Certain Transfers of Qualifying
Geothermal or Mineral Interests

Form
(Rev. January 2011)
Department of the Treasury
Internal Revenue Service

OMB No. 1545-2099

Employer identification number

Name of entity
Number, street, and room or suite no. (If a P.O. box, see instructions)
City or town, state, and ZIP code

Tax Computation
1
2

Date of sale or other disposition (MM/DD/YYYY) . . . . . . . . . . . . . . . .
If the property was sold or exchanged, enter the sales price of the interest transferred. If the
property was leased, enter the income realized as a result of the transfer . . . . . . . .

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3

Cost or other basis of interest transferred. Enter -0- if the property was leased .

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3

4

Gain or income realized. Subtract line 3 from line 2. If zero or less, enter -0- .

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5

Fair market value of the interest transferred as of the date shown on line 1

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6

Multiply line 5 by 20% (.20) .

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Multiply line 4 by 35% (.35) .

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Tax. Add lines 6 and 7

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Tax paid with Form 7004 .

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Tax due. Enter the excess, if any, of line 8 over line 9

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Overpayment. Enter the excess, if any, of line 9 over line 8

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11

Paid
Preparer
Use Only

▲

Sign
Here

Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge
and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.

Your signature
Print/Type preparer’s name

Date
Preparer's signature

Title
Date

Check
if
self-employed

▶

Firm's EIN

Firm's address ▶

Phone no.

Firm's name

General Instructions
Section references are to the Internal
Revenue Code.

Purpose of Form
Use Form 8924 to report and pay the
excise tax on certain transfers of qualifying
geothermal or mineral interests.

Who Must File
An eligible entity who subsequently
transfers ownership or possession (by sale,
exchange, or lease) of a qualifying mineral
or geothermal interest must file Form 8924
for each transfer of an interest acquired,
directly or indirectly, in:
• A conservation sale in which the previous
transferor excluded 25% of the qualifying
gain, or

• A transfer in which the previous
transferor was relieved of liability for the
Form 8924 tax.
Relief from liability. An eligible entity is
not required to file Form 8924 if:
• The transferee is an eligible entity which
provides the transferor with a qualifying
letter of intent at the time of the transfer,
• The transferee is not an eligible entity but
establishes to the satisfaction of the
Secretary of the Treasury that the transfer
of ownership or possession will be
consistent with section 170(h)(5) and
provides the transferor with a qualifying
letter of intent at the time of the transfer, or
• Form 8924 tax has previously been paid
as a result of a previous transfer of
ownership or possession of the same
interest.

For Paperwork Reduction Act Notice, see instructions.

Cat. No. 37736P

PTIN

▶

When To File
File Form 8924 by the later of June 30,
2011, or the 90th day following the taxable
transfer. If you need more time to file, use
Form 7004, Application for Automatic 6Month Extension of Time To File Certain
Business Income Tax, Information, and
Other Returns, by the due date of Form
8924. Form 7004 does not extend the time
for payment of tax.

Amended Return
To amend a previously filed Form 8924, file
a corrected Form 8924 and write
“Amended” at the top of the form.

Form 8924 (Rev. 1-2011)

Form 8924 (Rev. 1-2011)

Where To File
File Form 8924 with the Department of the
Treasury, Internal Revenue Service Center,
Cincinnati, OH 45999.

Rounding Off to Whole
Dollars
You may show money items on the return
as whole dollars. To do so, drop any
amount less than 50 cents and increase
any amount from 50 cents through 99
cents to the next higher dollar.

Signature
See the instructions for the signature
section of your federal income tax return.

Interest and Penalties
Interest. Interest is charged on taxes not
paid by the due date at a rate determined
under section 6621.
Late filing of return. A penalty of 5% a
month or part of a month, up to a
maximum of 25%, is imposed on the net
amount due if Form 8924 is not filed when
due.
Late payment of tax. Generally, the
penalty for not paying tax when due is 1/2
of 1% of the unpaid amount, up to a
maximum of 25%, for each month or part
of a month the tax remains unpaid. The
penalty is imposed on the net amount due.

Definitions
Bureau of Land Management land. This
term means the Bureau of Land
Management land and any federally-owned
minerals located south of the Blackfeet
Indian Reservation and east of the Lewis
and Clark National Forest to the eastern
edge of R. 8 W., beginning in T. 29 N.
down to and including T. 19 N. and all of
T. 18 N., R. 7 W.
Conservation sale. A conservation sale
means a sale which meets the following
requirements.
• The transferee of the qualifying mineral or
geothermal interest is an eligible entity.
• At the time of the sale, the transferee
provides the transferor with a qualifying
letter of intent.
• The sale is not made under an order of
condemnation or eminent domain.
Eligible entity. An eligible entity means:
• A governmental unit referred to in section
170(c)(1) or an agency or department
thereof operated primarily for one or more
of the conservation purposes specified in
clause (i), (ii), or (iii) of section170(h)(4)(A), or
• An entity that is described in section
170(b)(1)(A)(vi) or section 170(h)(3)(B) and
organized and at all times operated
primarily for one or more of the
conservation purposes specified in clause
(i), (ii), or (iii) of section 170(h)(4)(A).

Page

Eligible federal land. The term eligible
federal land means the Bureau of Land
Management land and the Forest Service
land, as generally depicted on the map
entitled “Rocky Mountain Front Mineral
Withdrawal Area” and dated January 8,
2007. You can view an electronic version
of the map at www.fs.fed.us/land/staff/
rocky_mtn_front_withdrawal.shtml.
Forest Service land. This term means the
Forest Service land and any federallyowned minerals located:
• In the Rocky Mountain Division of the
Lewis and Clark National Forest, including
the approximately 356,111 acres of land
made unavailable for leasing by the August
28, 1997, Record of Decision for the Lewis
and Clark National Forest Oil and Gas
Leasing Environmental Impact Statement
and that is located from T. 31 N. to T. 16 N.
and R. 13 W. to R. 7 W.; and
• Within the Badger Two Medicine Area of
the Flathead National Forest including the
land located in T. 29 N. from the western
edge of R. 16 W. to the eastern edge of R.
13 W., and the land located in T. 28 N., Rs.
13, and 14 W.
Qualifying letter of intent. A qualifying
letter of intent means a written letter of
intent that includes the following statement:
“The transferee’s intent is that this
acquisition will serve one or more of the
conservation purposes specified in clause
(i), (ii), or (iii) of section 170(h)(4)(A) of the
Internal Revenue Code of 1986, that the
transferee’s use of the deposits so
acquired will be consistent with section
170(h)(5) of such Code, and that the use of
the deposits will continue to be consistent
with such section, even if ownership or
possession of such deposits is
subsequently transferred to another
person.”
Qualifying mineral or geothermal
interest. A qualifying mineral or geothermal
interest means an interest in any mineral or
geothermal deposit located on eligible
federal land that constitutes the
transferor’s entire interest in the deposit.
An interest in any mineral or geothermal is:
deposit is not the transferor’s entire
interest if the interest in that mineral or
geothermal deposit was divided in order to
avoid the requirements of a qualifying
mineral or geothermal interest or section
170(f)(3)(A). The transferor’s entire interest
in such deposit does not fail to be a
qualifying mineral or geothermal interest
solely because the transferor has retained
an interest in other deposits, even if the
other deposits are contiguous with such
certain deposit and were acquired by the
transferor along with such certain deposit
in a single conveyance.

2

Specific Instructions
Name and address. Enter the name
shown on the eligible entity’s most
recently filed federal income tax return.
Include the suite, room, or other unit
number after the street address. If the Post
Office does not deliver mail to the street
address and the entity has a P.O. box,
show the box number instead of the street
address.

Tax Computation
Line 10
The tax due must be paid in full when
Form 8924 is filed. Make the check or
money order payable to the “United States
Treasury.” Write the entity’s name,
address, employer identification number,
and Form 8924 on the check or money
order.

Line 11
The IRS will refund the amount on line 11 if
no other taxes are owed.
Paperwork Reduction Act Notice. We
ask for the information on this form to carry
out the Internal Revenue laws of the United
States. You are required to give us the
information. We need it to ensure that you
are complying with these laws and to allow
us to figure and collect the right amount of
tax. Section 6109 requires return preparers
to provide their identifying numbers on the
return.
You are not required to provide the
information requested on a form that is
subject to the Paperwork Reduction Act
unless the form displays a valid OMB
control number. Books or records relating
to a form or its instructions must be
retained as long as their contents may
become material in the administration of
any Internal Revenue law. Generally, tax
returns and return information are
confidential, as required by section 6103.
The time needed to complete and file
this form will vary depending on individual
circumstances. The estimated average
time is:
Recordkeeping .

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4 hr., 4 min.

Learning about the law
or the form . . . .

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. 42 min.

Preparing, copying, assembling,
and sending the form to the IRS 47 min.
If you have comments concerning the
accuracy of these time estimates or
suggestions for making this form simpler,
we would be happy to hear from you. You
can write to the Internal Revenue Service,
Tax Products Coordinating Committee,
SE:W:CAR:MP:T:T:SP, 1111 Constitution
Ave., NW, IR-6526, Washington, DC
20224. DO NOT send the tax form to this
address. Instead, see Where To File
above.