2.204 -Excess Natural Resource Depletion Allowance

Item	Description	FY2009	FY2010	FY2011
2.204	Excess Natural Resource Depletion Allowance Taxpayers in extractive industries (mining or drilling for natural resources) may deduct a percentage of gross mining income as a depletion allowance ("percentage depletion") even if the cost basis of the property has been reduced to zero. The deduction may not exceed 50% (in some cases, 65%) of net income from the property. In the case of oil and gas, percentage depletion is available only to domestic oil and gas sold by "independent producers" (nonintegrated companies). The excess of the deduction available using the percentage of gross income method of depletion over a depletion deduction based on cost is a tax expenditure. Origin: IRC S. 613 and 613A Estimate: Negligible	Negligible	Negligible	Negligible

Key:

ORIGIN
IRC	Federal Internal Revenue Code (26 U.S.C.)
M.G.L.	Massachusetts General Laws
U.S.C	United States Code
ESTIMATES	All estimates are in $ millions.