Wind by Guest Blogger Selena Fogg, CPA, MPAPosted: April 18, 2016
Wind. The Panhandle of Texas has a lot of wind. Amarillo is listed as fourth in the top windy cities of the United States. Wind has been in the panhandle since before there were people here.
Wind has been used by the panhandle for centuries to create income. Windmills were used to mill grain and pump water. Now, wind turbines generate electricity. Wind pumps are used to pump water.
The wind turbine industry has taken off. More wind farms have been established. Many wind turbines have been set up on personally owned property, then the wind turbine companies have to make payments to the people for the use of their land. These payments can be rental income or easement income. Each of these has their own tax treatments.
1099Misc Box 1 Rental income is reported on Schedule E as Rental Income. Different kinds of expenses can be taken here such as property tax and insurance expenses.
1099Misc Box 7 Misc income is reported on page one of the tax return as Other Income. This is income received as a result of easements, payments per turbine, or a percentage of revenue from the wind turbine company.
Selena Fogg, CPA, MPA, graduated with her Masters Degree in Public Accounting in 2011 and passed the CPA exam that same year. She been working in accounting since 1990.
Selena is currently on the board of Panhandle Promise Projects, a local nonprofit organization and is president of the Panhandle Chapter of TSCPA.