Browse Arkansas Code titles and sections
26-51-429. Deductions — Depletion allowances.
Arkansas Code — all titles (historical 2020) · legal_authorities
26-51-429. Deductions — Depletion allowances.
(a) In the case of all natural resources for which a deduction for depletion is allowed under 26 U.S.C. §§ 611, the provisions of 26 U.S.C. §§ 611 — 613, 614, 616, and 617, as in effect on January 1, 2019, are adopted in computing the depletion allowance deduction under Arkansas income tax law.
(b) In computing the depletion allowance deduction allowed by this section for oil and gas wells, the provisions of 26 U.S.C. § 613 are not in effect, but instead the computation of the amount of the depletion deduction is controlled by the provisions of 26 U.S.C. § 613A, as in effect on January 1, 2019, which are adopted as part of the state income tax law.
Source: Arkansas Code — historical release 78 (November 6, 2020) · 26-51-429
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Stable record: arkansas_code:legal_authorities:26-51-429
Source file: gov.ar.code.title.26.odt
Pages: Not recorded – Not recorded
Passage SHA-256: 2374658a3b0164b6dad43e2f6836e260f8abde9db926662686a747bfe33f7578
Source location: content.xml paragraph 12867
Stored source content
26-51-429. Deductions — Depletion allowances.
(a) In the case of all natural resources for which a deduction for depletion is allowed under 26 U.S.C. §§ 611, the provisions of 26 U.S.C. §§ 611 — 613, 614, 616, and 617, as in effect on January 1, 2019, are adopted in computing the depletion allowance deduction under Arkansas income tax law.
(b) In computing the depletion allowance deduction allowed by this section for oil and gas wells, the provisions of 26 U.S.C. § 613 are not in effect, but instead the computation of the amount of the depletion deduction is controlled by the provisions of 26 U.S.C. § 613A, as in effect on January 1, 2019, which are adopted as part of the state income tax law.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** In the case of mines, oil and gas wells, other natural deposits, and timber, there shall be allowed as a deduction in computing taxable income a reasonable allowance for depletion and for depreciation of improvements, according to the peculiar conditions in each case; such reasonable allowance in all cases to be made under regulations prescribed by the Secretary. For purposes of this part, the term “mines” includes deposits of waste or residue, the extraction of ores or minerals from which is treated as mining under section 613(c). In any case in which it is ascertained as a result of operations or of development work that the recoverable units are greater or less than the prior estimate thereof, then such prior estimate (but not the basis for depletion) shall be revised and the allowance under this section for subsequent taxable years shall be based on such revised estimate.
**(b) Special rules**
(1) **Leases** — In the case of a lease, the deduction under this section shall be equitably apportioned between the lessor and lessee.
(2) **Life tenant and remainderman** — In the case of property held by one person for life with remainder to another person, the deduction under this section shall be computed as if the life tenant were the absolute owner of the property and shall be allowed to the life tenant.
(3) **Property held in trust** — In the case of property held in trust, the deduction under this section shall be apportioned between the income beneficiaries and the trustee in accordance with the pertinent provisions of the instrument creating the trust, or, in the absence of such provisions, on the basis of the trust income allocable to each.
(4) **Property held by estate** — In the case of an estate, the deduction under this section shall b
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 611
Stored review status: release_metadata_unconfirmed. The source passage cites 26 U.S.C. § 611. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
Page 1793
TITLE 26—INTERNAL REVENUE CODE
§ 611
1 Editorially supplied. Section 613A added by Pub. L. 94–12
without corresponding amendment of part analysis.
Act of 1986 [Pub. L. 99–514, amending section 368 of this
title, repealing this section and enacting provisions set
out as notes under sections 368 and 597 of this title]
(other
than
subsection
(c)(2)(B)
thereof
[section
904(c)(2)(B) of Pub. L. 99–514, formerly set out as a note
above]) is hereby repealed and the Internal Revenue
Code of 1986 shall be applied as if the amendments made
by such section had not been enacted.’’
REFERENCES TO FEDERAL SAVINGS AND LOAN
INSURANCE CORPORATION
Pub. L. 101–73, title XIV, § 1401(c)(7), Aug. 9, 1989, 103
Stat. 550, provided that: ‘‘Any reference to the Federal
Savings and Loan Insurance Corporation in section 597
of the Internal Revenue Code of 1986 (as in effect on the
day before the date of the enactment of this Act [Aug.
9, 1989]) shall be treated as including a reference to the
Resolution Trust Corporation and the FSLIC Resolu-
tion Fund.’’
ANNUAL REPORTS ON TRANSACTIONS IN WHICH FEDERAL
FINANCIAL ASSISTANCE PROVIDED
Pub. L. 101–73, title XIV, § 1403, Aug. 9, 1989, 103 Stat.
551, which required the Secretary of the Treasury to
submit annual reports to the Senate and to the Com-
mittee on Ways and Means of the House of Representa-
tives on transactions with respect to which Federal fi-
nancial assistance subject to this section was provided,
terminated, effective May 15, 2000, pursuant to section
3003 of Pub. L. 104–66, as amended, set out as a note
under section 1113 of Title 31, Money and Finance. See,
also, page 142 of House Document No. 103–7.
[§ 601. Repealed. Pub. L. 94–455, title XIX,
§ 1901(a)(85), Oct. 4, 1976, 90 Stat. 1778]
Section,
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 611
Stored review status: historical_2024_not_currentness_verified. The source passage cites 26 U.S.C. § 611. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** In the case of the mines, wells, and other natural deposits listed in subsection (b), the allowance for depletion under section 611 shall be the percentage, specified in subsection (b), of the gross income from the property excluding from such gross income an amount equal to any rents or royalties paid or incurred by the taxpayer in respect of the property. Such allowance shall not exceed 50 percent (100 percent in the case of oil and gas properties) of the taxpayer’s taxable income from the property (computed without allowance for depletion and without any deduction under section 199A). For purposes of the preceding sentence, the allowable deductions taken into account with respect to expenses of mining in computing the taxable income from the property shall be decreased by an amount equal to so much of any gain which (1) is treated under section 1245 (relating to gain from disposition of certain depreciable property) as ordinary income, and (2) is properly allocable to the property. In no case shall the allowance for depletion under section 611 be less than it would be if computed without reference to this section.
**(b) Percentage depletion rates** The mines, wells, and other natural deposits, and the percentages, referred to in subsection (a) are as follows:
(1) **22 percent**
(A) sulphur and uranium; and
(B) if from deposits in the United States—anorthosite, clay, laterite, and nephelite syenite (to the extent that alumina and aluminum compounds are extracted therefrom), asbestos, bauxite, celestite, chromite, corundum, fluorspar, graphite, ilmenite, kyanite, mica, olivine, quartz crystals (radio grade), rutile, block steatite talc, and zircon, and ores of the following metals: antimony, beryllium, bismuth, cadmium, cobalt, columbium, l
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 613
Stored review status: release_metadata_unconfirmed. The source passage cites 26 U.S.C. § 613. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
Page 1794
TITLE 26—INTERNAL REVENUE CODE
§ 612
Editorial Notes
AMENDMENTS
1976—Subsec. (a). Pub. L. 94–455 struck out ‘‘or his
delegate’’ after ‘‘Secretary’’.
1958—Subsec. (d)(4). Pub. L. 85–866 substituted ‘‘devi-
sees’’ for ‘‘devises’’.
Statutory Notes and Related Subsidiaries
EFFECTIVE DATE OF 1958 AMENDMENT
Amendment by Pub. L. 85–866 applicable to taxable
years beginning after Dec. 31, 1953, and ending after
Aug. 16, 1954, see section 1(c)(1) of Pub. L. 85–866, set out
as a note under section 165 of this title.
§ 612. Basis for cost depletion
Except as otherwise provided in this sub-
chapter, the basis on which depletion is to be al-
lowed in respect of any property shall be the ad-
justed basis provided in section 1011 for the pur-
pose of determining the gain upon the sale or
other disposition of such property.
(Aug. 16, 1954, ch. 736, 68A Stat. 208.)
§ 613. Percentage depletion
(a) General rule
In the case of the mines, wells, and other nat-
ural deposits listed in subsection (b), the allow-
ance for depletion under section 611 shall be the
percentage, specified in subsection (b), of the
gross income from the property excluding from
such gross income an amount equal to any rents
or royalties paid or incurred by the taxpayer in
respect of the property. Such allowance shall
not exceed 50 percent (100 percent in the case of
oil and gas properties) of the taxpayer’s taxable
income from the property (computed without al-
lowance for depletion and without any deduc-
tion under section 199A). For purposes of the
preceding sentence, the allowable deductions
taken into account with respect to expenses of
mining in computing the taxable income from
the property shall be decreased by an amount
equal to so much of any gain which (1) is treated
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 613
Stored review status: historical_2024_not_currentness_verified. The source passage cites 26 U.S.C. § 613. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** Except as otherwise provided in this section, the allowance for depletion under section 611 with respect to any oil or gas well shall be computed without regard to section 613.
**(b) Exemption for certain domestic gas wells**
(1) **In general** — The allowance for depletion under section 611 shall be computed in accordance with section 613 with respect to—
(A) regulated natural gas, and
(B) natural gas sold under a fixed contract,
and 22 percent shall be deemed to be specified in subsection (b) of section 613 for purposes of subsection (a) of that section.
(2) **Natural gas from geopressured brine** — The allowance for depletion under section 611 shall be computed in accordance with section 613 with respect to any qualified natural gas from geopressured brine, and 10 percent shall be deemed to be specified in subsection (b) of section 613 for purposes of subsection (a) of such section.
(3) **Definitions** — For purposes of this subsection—
(A) *Natural gas sold under a fixed contract* — The term “natural gas sold under a fixed contract” means domestic natural gas sold by the producer under a contract, in effect on February 1, 1975, and at all times thereafter before such sale, under which the price for such gas cannot be adjusted to reflect to any extent the increase in liabilities of the seller for tax under this chapter by reason of the repeal of percentage depletion for gas. Price increases after February 1, 1975, shall be presumed to take increases in tax liabilities into account unless the taxpayer demonstrates to the contrary by clear and convincing evidence.
(B) *Regulated natural gas* — The term “regulated natural gas” means domestic natural gas produced and sold by the producer, before July 1, 1976, subject to the jurisdic
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 613A
Stored review status: release_metadata_unconfirmed. The source passage cites 26 U.S.C. § 613A. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
Page 1798
TITLE 26—INTERNAL REVENUE CODE
§ 613A
‘‘(i) the amendments made by subsection (b)
[amending this section] shall apply to taxable
years with respect to which such election is effec-
tive and
‘‘(ii) provisions having the same effect as the
amendments made by subsection (b) [amending
this section] shall be deemed to be included in the
Internal Revenue Code of 1939 and shall apply to
taxable years with respect to which such election
is effective in lieu of the corresponding provisions
of such Code.
‘‘(B) YEARS
TO
WHICH
APPLICABLE.—An election
made under subparagraph (C) to have the provisions
of this paragraph apply shall be effective for all
taxable years beginning before January 1, 1961, in
respect of which—
‘‘(i) the assessment of a deficiency,
‘‘(ii) the refund or credit of an overpayment, or
‘‘(iii) the commencement of a suit for recovery
of a refund under section 7405 of the Internal Rev-
enue Code of 1986 [formerly I.R.C. 1954] [section
7405 of this title],
is not prevented on the date of the enactment of
this paragraph [Sept. 14, 1960] by the operation of
any law or rule of law. Such election shall also be
effective for any taxable year beginning before Jan-
uary 1, 1961, in respect of which an assessment of a
deficiency has been made but not collected on or
before the date of the enactment of this paragraph.
‘‘(C) TIME AND MANNER OF ELECTION.—An election
to have the provisions of this paragraph apply shall
be made by the taxpayer on or before the 60th day
after the date of publication in the Federal Register
of final regulations issued under authority of sub-
paragraph (F), and shall be made in such form and
manner as the Secretary of the Treasury or his del-
egate shall prescribe by regulations. Such election,
if made, may
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 613A
Stored review status: historical_2024_not_currentness_verified. The source passage cites 26 U.S.C. § 613A. This identifies an authority to review, not proof of applicability.