[Code of Federal Regulations]
[Title 26, Volume 7]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.613-1]

[Page 411-412]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.613-1  Percentage depletion; general rule.

    (a) In general. In the case of a taxpayer computing the deduction 
for depletion under section 611 with respect to minerals on the basis of 
a percentage of gross income from the property, as defined in section 
613(c) and Sec. Sec. 1.613-3 and 1.613-4, the deduction shall be the 
percentage of the gross income as specified in section 613(b) and Sec. 
1.613-2. The deduction shall not exceed 50 percent (100 percent in the 
case of oil and gas properties for taxable years beginning after 
December 31, 1990) of the taxpayer's taxable income from the property 
(computed without regard to the allowance for depletion). The taxable

[[Page 412]]

income shall be computed in accordance with Sec. 1.613-5. In no case 
shall the deduction for depletion computed under this section be less 
than the deduction computed upon the cost or other basis of the property 
provided in section 612 and the regulations thereunder. The 
apportionment of the deduction between the several owners of economic 
interests in a mineral deposit will be made as provided in paragraph (c) 
of Sec. 1.611-1. For rules with respect to ``gross income from the 
property'' and for definition of the term ``mining,'' see Sec. Sec. 
1.613-3 and 1.613-4. For definitions of the terms ``property,'' 
``mineral deposit,'' and ``minerals,'' see paragraph (d) of Sec. 1.611-
1.
    (b) Denial of percentage depletion in case of oil and gas wells. 
Except as otherwise provided in section 613A and the regulations 
thereunder, in the case of oil or gas which is produced after December 
31, 1974, and to which gross income is attributable after that date, the 
allowance for depletion shall be computed without regard to section 613.

[T.D. 8348, 56 FR 21938, May 13, 1991, as amended by T.D. 8437, 57 FR 
43899, Sept. 23, 1992]