§612 — Basis for cost depletion
35 cases·3 followed·2 distinguished·1 criticized·29 cited—9% support
Statute Text — 26 U.S.C. §612
Except as otherwise provided in this subchapter, the basis on which depletion is to be allowed in respect of any property shall be the adjusted basis provided in section 1011 for the purpose of determining the gain upon the sale or other disposition of such property.
Treasury Regulations
- Treas. Reg. §Treas. Reg. §1.612-1 Basis for allowance of cost depletion
- Treas. Reg. §Treas. Reg. §1.612-1(a) In general.
- Treas. Reg. §Treas. Reg. §1.612-1(b) Special rules.
- Treas. Reg. §Treas. Reg. §1.612-1(c) Cross references.
- Treas. Reg. §Treas. Reg. §1.612-1(i) §1.612-1(i)
- Treas. Reg. §Treas. Reg. §1.612-2 Allowable capital additions in case of mines
- Treas. Reg. §Treas. Reg. §1.612-2(a) In general.
- Treas. Reg. §Treas. Reg. §1.612-2(b) Special rule.
- Treas. Reg. §Treas. Reg. §1.612-3 Depletion; treatment of bonus and advanced royalty
- Treas. Reg. §Treas. Reg. §1.612-3(a) Bonus.
- Treas. Reg. §Treas. Reg. §1.612-3(b) Advanced royalties.
- Treas. Reg. §Treas. Reg. §1.612-3(c) Delay rental.
- Treas. Reg. §Treas. Reg. §1.612-3(d) Percentage depletion deduction with respect to bonus and advanced royalty.
- Treas. Reg. §Treas. Reg. §1.612-3(e) Cross reference.
- Treas. Reg. §Treas. Reg. §1.612-4 Charges to capital and to expense in case of oil and gas wells
- Treas. Reg. §Treas. Reg. §1.612-4(a) Option with respect to intangible drilling and development costs.
- Treas. Reg. §Treas. Reg. §1.612-4(b) Recovery of optional items, if capitalized.
- Treas. Reg. §Treas. Reg. §1.612-4(c) Nonoptional items distinguished.
- Treas. Reg. §Treas. Reg. §1.612-4(d) Manner of making election.
- Treas. Reg. §Treas. Reg. §1.612-4(e) Effect of option and election.
- Treas. Reg. §Treas. Reg. §1.612-5 Charges to capital and to expense in case of geothermal wells
- Treas. Reg. §Treas. Reg. §1.612-5(a) Option with respect to intangible drilling and development costs.
- Treas. Reg. §Treas. Reg. §1.612-5(b) Recovery of optional items, if capitalized.
- Treas. Reg. §Treas. Reg. §1.612-5(c) Nonoptional items distinguished—(1) Capital Items: The option with respect to intangible drilling and development costs does not apply to expenditures by which the taxpayer acquires tangible property ordinarily considered as having a salvage value.
- Treas. Reg. §Treas. Reg. §1.612-5(d) Manner of making election.
35 Citing Cases
Ordinary income from an oil and gas well may be eligible for cost depletion under section 612 or percentage depletion under section 613A. Section 613A(d)(5) provides that percentage depletion for income from oil and gas wells does not apply to "any lease bonus, advance royalty, or other amount payable without regard to production from property." See also sec.
The Increased Deficiency Section 612 provides that gross income includes all income from whatever source derived, unless the taxpayer can establish the application of a specific·legislative authorization to exclude income from taxation.
Petitioner calculated its depletion deductions using the percentage depletion method under section 613, as opposed to the cost depletion method under section 612, for regular tax purposes for all of its mines during the years at issue.
at 976, 977, effective with "any transaction which the fiduciary or disqualified person discovers, or reasonably should have discovered, after the date ofthe enactment ofthis Act [August 17, 2006] constitutes a prohibited transaction." Section 4975(d)(23) generally provides that the prohibitions set forth in section 4975(c)(1)(B) do not apply to the lending ofmoney or other extension ofcredit between a plan and a disqualified person "in connection with the acquisition, holding, or disposition of
97-29-1 (1999); see also Davis v.
The first method, cost depletion under section 612, focuses on the property's adjusted basis.
which - 13 - describes the cost basis provided by section 612, which, in turn, describes an "adjusted basis" provided by section 1011.
This allowed Smokey Oil to claim cost depletion deductions for the leases on its tax returns for 1989 and 1990 under section 612, which, if sustained, would have resulted in substantial income tax savings to the True family.
This allowed Smokey Oil to claim cost depletion deductions for the leases on its tax returns for 1989 and 1990 under section 612, which, if sustained, would have resulted in substantial income tax savings to the True family.
1.612-1, Income Tax Regs. Units of timber are ordinarily expressed in terms such as thousands of board feet, log scale or cords, as appropriate. Timber quantity is generally estimated upon acquisition and subsequently increased as timber is acquired and decreased as units of timber are cut and sold. - 43 - recognition for future yea