Income tax depletion allowance
Landowners within the High Plains Water District service area who utilize groundwater produced from the Ogallala Formation in the business of irrigated farming may claim a cost-in-water income tax depletion allowance on their federal income tax return.
Depletion Quick Facts:
- Taxpayer must have paid more for a tract of land because it had groundwater in storage
- Based on annual depreciation
- Directly related to the Internal Revenue Service (IRS) approved annual decline in water levels for individual tracts of land
- HPWD contracts with a professional land appraiser
- HPWD set up fee cost is $10
- Provides an annual water “bank statement” to landowner
For more information, contact Jed Leibbrandt.
If this is your initial request, download the cost-in-water income tax depletion allowance form here.
If you have previously requested this service, download the reorder request form here.