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Qualified Natural Gas from Geopressured Brine [Internal Revenue]
Understanding Qualified Natural Gas from Geopressured Brine [Internal Revenue]
Definition & Meaning
The term Qualified Natural Gas from Geopressured Brine refers to natural gas that is produced from geopressured brine. According to federal regulations, this gas must be sourced from wells that began drilling after September 30, 1978, and before January 1, 1984. This classification is important for tax purposes under the Internal Revenue Code, specifically for determining eligibility for certain deductions.
Table of content
Legal Use & context
This term is primarily used in tax law, particularly relating to deductions for natural resources. It is relevant for businesses and individuals involved in the production of natural gas from geopressured brine. Understanding this classification can help users navigate tax benefits effectively. Users may find legal forms and templates helpful for managing related tax filings and compliance requirements.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A natural gas company drills a well in Louisiana that begins production in 1980. This gas qualifies as Qualified Natural Gas from Geopressured Brine, allowing the company to claim tax deductions.
Example 2: A hypothetical example involves a small business that starts drilling in Texas in 1985. Since the drilling date is outside the specified range, the produced gas does not qualify.
Relevant laws & statutes
The primary statute governing this term is the Natural Gas Policy Act of 1978. Additionally, regulations under 26 CFR 1.613A-7 (e) outline the specific criteria for classification as Qualified Natural Gas from Geopressured Brine.
Comparison with related terms
Term
Definition
Key Differences
Natural Gas
Gas that occurs naturally in the earth, primarily composed of methane.
Qualified Natural Gas from Geopressured Brine is specifically sourced from geopressured brine and has tax implications.
Geopressured Brine
Water that is under high pressure and contains dissolved minerals.
Geopressured brine is the source of the natural gas classified as Qualified Natural Gas.
Common misunderstandings
What to do if this term applies to you
If you are involved in the production of natural gas from geopressured brine, it is essential to determine if your gas qualifies under the defined criteria. You may benefit from consulting a tax professional or using legal forms from US Legal Forms to ensure compliance and maximize potential deductions. If your situation is complex, seeking professional legal assistance is advisable.
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