N.Y. Comp. Codes R. & Regs. tit. 20 § 112.8

Current through Register Vol. 46, No. 45, November 2, 2024

Section 112.8 - Modification for mines, oil and gas wells and other natural deposits

Tax Law, § 612(i)

(a) In the case of mines, oil and gas wells and other natural deposits, any allowance for percentage depletion under section 613 or section 613A of the Internal Revenue Code must be added to Federal adjusted gross income (see section 112.2[h] of this Part). However, an allowance for cost depletion with respect to such property must be subtracted from Federal adjusted gross income in the amount which would be deductible under section 611 of the Internal Revenue Code if such deduction were computed without reference to section 613 or section 613A of such code (see section 112.3[m] of this Part).

(b) With respect to the computation of depletion under this section, the basis for such computation for taxable years beginning in 1972 is the Federal basis. For subsequent taxable years, the basis for such computation shall be reduced only by the deduction for the allowance for cost depletion deductible under section 612 (i) of the Tax Law.

(c) The portion of any gain from the sale or other disposition of such property having a higher adjusted basis for New York State personal income tax purposes than for Federal income tax purposes, that does not exceed such difference in basis, must be subtracted from Federal adjusted gross income (see section 112.3[m] of this Part).

(d) Once the cost or other basis of property has been exhausted or reduced to zero, no further modification for cost depletion will be allowed (see section 112.3[m] of this Part). However, if percentage depletion has been claimed for Federal income tax purposes, the modification required by section 612 (b)(10) of the Tax Law (see section 112.2[h] of this Part) must be made.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 112.8