Percentage Depletion Method

Percentage Depletion Method means:
a method that 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 cost depletion. Percentage depletion is generally available for most types of solid mineral but is restricted to independent producers, royalty owners, and some other narrow categories of oil and gas producers. Former IRC (check if this IRC provision is current here) §§613 and 613A.

Independent Producers' And Royalty Owners' Exemption

The percentage depletion method rate of 15% applies to an average daily production of 1,000 barrels of oil per day and six million cubic feet of gas.