However, Justice Souter stated that the unrecovered costs of depreciable improvements to a mineral deposit could not be included in the adjusted basis of the property that was offset against the year's percentage depletion
in arriving at the amount that constitutes a tax preference.
The community property included oil and gas working interests and royalty interests, which did not qualify for percentage depletion
. D died Mar.
613A(d)(5)to prevent percentage depletion
deductions on lease bonus and advance royalty income.
Accordingly, to avoid that result in this case, the deduction allowable in the year of repayment must be reduced by the percentage depletion
allowance which respondent claimed and the Commissioner allowed in the years of receipt as a result of the inclusion of the later-refunded items in respondent's "gross income from the property" in those years.
57(a)(1)) as in force during 1981 and 1982 did not produce a tax preference item until the oil and gas percentage depletion
exceeded both the depletable and depreciable bases of the producing property.
OKLAHOMA CITY Oil and gas royalty owners get to keep their earnings from petroleum and natural gas mineral sales, even after facing possible changes to an important tax benefit.<br />National Association of Royalty Owners Oklahoma chapter board member Terry Stowers said both state and federal lawmakers had their eyes on changing the percentage depletion
We also were glad to see that the final bill keeps whole percentage depletion
, the LIFO accounting method and Like-Kind Exchanges for real estate.
Adjusted AMT is defined as AMT less the portion of the tax attributable to"nondeferral items," such as miscellaneous itemized deductions, state and local taxes, percentage depletion
in excess of basis, and interest income from private activity bonds (IRC [section]53(d)(1)(B)).
The amount of taxable royalties, but not land lease payments, may be reduced by a depletion deduction, calculated either under the percentage depletion
method or the cost depletion method.
For example, it does not include extension provisions related to the 100 percent-of-net-income limitation on percentage depletion
for oil and gas from marginal wells or brownfields environmental remediation expensing.
A qualified trade or business is any trade or business other than businesses that (1) provide personal or professional services; (2) own, deal in, or rent real property; (3) operate a farm; (4) operate a hotel, motel, restaurant, or similar business; (5) conduct banking, insurance, leasing, financing, investing, or a similar business; or (6) extract products subject to percentage depletion