Gravel sale

[906bw]

I sold several loads of base material from my farm to a contractor. No 1099 and he paid by check. My best guess is that the payment should be classified as "Other income" but I read that gravel is eligible for 5% depletion.  If it is treated like oil/gas, do I enter it on a new Schedule E and then enter the 5% manually?

[PatriciaV]

Yes, the income would be entered as "Other" since you didn't receive a 1099. There isn't a specific line for depletion on Schedule F (Farming). But you can enter this as a Miscellaneous Expense with a custom description. You don't own a royalty property, so Schedule E wouldn't be appropriate.

According to Depletion Percentages per Section 613(b), 5% of revenue for gravel percentage depletion is correct.