Percentage Depletion

Independent Producer
An independent producer is a taxpayer who produces oil for the market without owning a pipeline system or refinery. These producers often benefit from a 15% percentage depletion rate.
Percentage Depletion Method
The Percentage Depletion Method permits a taxpayer with an economic interest in a mineral deposit to deduct a specified percentage of the gross income from the deposit instead of focusing solely on cost depletion.

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