Water-depletion data available for tax claims

Data to support landowners' claims for a cost in water income tax depletion allowance for federal income tax returns have been inspected and approved by an Internal Revenue Service engineer for tax year 2002.

Taxpayers who own land within the 15-county High Plains Underground Water Conservation District service area may now obtain these data from the water district's office in Lubbock.

The water district contracts with a professional land appraiser, who documents land sales occurring within portions of the district each year. The average selling price for dryland farm sales is subtracted from the average selling price for irrigated farms.

The price difference is used to calculate the value of the water.

Landowners who have previously claimed the allowance and have established their cost-in-water at the time of land purchase will only need the amount of the 2002 decline to substantiate their claim.

The cost is $10 for the data for each parcel of land when decline is shown.

Landowners who have not previously claimed the allowance need to establish the number of feet of saturated material they had beneath their land at the time of acquisition, the cost of the water which has been determined by comparing actual land sales with and without ground water at the date of land acquisition, and the decline in the water level during the tax year.

For a new claim, taxpayers must include a complete legal description of the tract of land on which the claim is to be filed; the date of land acquisition; the number of acres in the tract; and the landowner's name, address, and Social Security number.

For $50, one receives the IRS-approved cost-in-water guidelines, the number of feet of saturated thickness for the year of acquisition, and the water level decline data for the current year and up to two previous years.

If it has been more than three years since water level decline data have been requested, landowners should provide their name, address, Social Security number or federal identification number, the legal description of the land tract, the total number of acres in the tract and the total number of years for which these data are requested.

All requests for water depletion data must be in writing. The requests may be mailed to the High Plains Water District, or you may stop by the Lubbock office and fill out a request form. Requests for cost-in-water data are filled on a first-come, first-served basis. They should be directed to Keith Whitworth, High Plains Water District, 2930 Avenue Q, Lubbock, TX 79411-2499.

He may be reached at 806-762-0181 or by e-mail at [email protected]

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