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ella [17]
3 years ago
11

For an oil and gas limited partnership (LP), allowances in the form of deductions are allowed by the IRS to be taken to compensa

te for a depleting resource. The allowance can be taken based on
Business
1 answer:
Triss [41]3 years ago
3 0

Answer:

The allowance can be taken based on:

a reduction (production) of the oil and gas reserves.

Explanation:

A limited partnership's allowance for depletion is a special form of depreciation used to account for the gradual reduction in the value of natural resources based on their usage or consumption.  There are two methods for recognizing depletion of natural resources.  They are the cost depletion method, which is based on usage, and the percentage depletion method, which is a percentage of gross earnings.  Then, depletion is different from depreciation, in that depreciation is for tangible assets, while depletion is for natural assets.

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At a recent training seminar of QRS Corp., employees were given slips of paper with job titles on them and were then given a sce
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