Investors & landlords

It depends.  In Pennsylvania (PA) you are allowed a depletion amount, same as federal, until you have recovered your cost basis in the royalty property.  For you the cost basis begins at inheritance and is the fair market value (FMV) of the property on the date of death of the original owner.

When you go through the PA return there will be a place to enter your allowable depletion amount. Watch the screens carefully when you come to the royalty income section. You will need to track this depletion each year and subtract it from your cost basis until you have recovered the cost.  When you reach zero, you will no longer be allowed to take depletion on the PA return.

See the image below.