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The oil depletion allowance in American (US) tax law is a tax break claimable by anyone with an economic interest in a mineral deposit or standing timber. [citation needed] The principle is that the asset is a capital investment that is a wasting asset, and therefore depreciation can reasonably be offset (effectively as a capital loss) against income.
Depletion is an accounting and tax concept used most often in the mining, timber, and petroleum industries. It is similar to depreciation in that it is a cost recovery system for accounting and tax reporting: "The depletion deduction" allows an owner or operator to account for the reduction of a product's reserves.
In making their income tax return for the year they deducted a sum which they claimed as an allowance for depletion of the timber included in their licences at the rate of $1.40 per thousand feet of timber cut. Viscount Simon Lord Macmillan Lord Simonds Lord Oaksey Lord Macdermott: Appeal dismissed Supreme Court of Canada
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Additional allowances are prescribed with respect to specified circumstances. [12] Specialized calculations for certain classes are also outlined in: Schedule III for property in Class 13 (leasehold interests) [13] [14] Schedule IV for property in Class 15 (property for cutting and removing timber from a timber limit) [15] [16]
The tax also may have distorted the way resources were allocated within the oil industry. Since the tax was imposed on oil production — i.e., upon its removal and sale — extraction (and other upstream operations) was penalized and other aspects of the business (refining and marketing, the downstream operations) become relatively favored.
The Timber Culture Act of 1873 was passed to foster cultivation of timber in arid regions by making available 160 free acres of land to anybody willing to plant trees upon 40 acres of it. [7] However, the new law had numerous loopholes that allowed non-residents to claim land for speculation purposes, and family members to give land to other ...
From January 2008 to May 2012, if you bought shares in companies when John W. Snow joined the board, and sold them when he left, you would have a -7.6 percent return on your investment, compared to a -4.2 percent return from the S&P 500.