Simulated Depletion Allowance definition
Simulated Depletion Allowance means a depletion allowance computed (in accordance with federal income tax principles) for each taxable year with respect to each oil and gas property (as defined in Section 614 of the Code), using the cost method of depletion. For purposes of computing the Simulated Depletion Allowance with respect to any property, the adjusted tax basis of such property shall be deemed to be the Simulated Basis in such property and in no event shall such allowance, in the aggregate, exceed such Simulated Basis.
Examples of Simulated Depletion Allowance in a sentence
The Simulated Depletion Allowance determined with respect to an oil and gas property shall, in the aggregate, reduce the Capital Accounts of the Partners only to the extent of the Partnership's Simulated Basis with respect to such property.
Any Simulated Depletion Allowance deductions attributable to a separate oil and gas property (as defined in Section 614 of the Code) shall be computed by the Partnership using cost depletion.
The Simulated Depletion Allowance shall be allocated among the Partners in the same proportion that the Simulated Basis of the oil and gas property (as defined in Section 614 of the Code) was allocated among the Partners pursuant to Paragraph 4.03(b).