depletion allowance

Also missing are repeals of a provision known as a “percentage depletion allowance,” that allows independent oil and gas producers and royalty holders to deduct 15 percent of gross revenue, year after year; that enables smaller operators to keep even uneconomical, marginal wells up and running.

“For this particular venture, both stars earned $5,000,000 each on their initial $40,000 investment. When the depletion allowance was taken into account, $1,375,000 of the $5,000,000 was tax-free. Other Hollywood stars who experienced similar successes in the oil business included Jimmy Stewart, Gene Autry, Don Ameche, and Frank Sinatra, who fittingly titled his first oil well ‘Crooner No. 1.’

The oil depletion allowance was created by Congress in 1926.

The first was the oil depletion allowance.

Among the first Hollywood stars to understand the tax benefits of the oil depletion allowance were Crosby and Hope.