Depletion Allowance

Pronunciation: /dɪˈpliʃən əˈlaʊəns/

Definitions of depletion allowance

noun a tax deduction that allows businesses to account for the reduction in value of natural resources as they are extracted or used up

Example Sentences

A1 A depletion allowance is a tax deduction for the cost of using up natural resources.

A2 Companies can take advantage of a depletion allowance to reduce their taxable income.

B1 Understanding how to calculate a depletion allowance is important for businesses in the mining industry.

B2 The government provides a depletion allowance to encourage the exploration and extraction of natural resources.

C1 Tax laws regarding depletion allowances can be complex and require expert advice for proper implementation.

C2 The company's financial statements reflect the depletion allowance as a way to account for the diminishing value of their natural resource assets.

Examples of depletion allowance in a Sentence

formal The company was able to benefit from the depletion allowance provided by the government.

informal The company got a tax break thanks to the depletion allowance.

slang The company scored a sweet deal with the depletion allowance.

figurative The depletion allowance acted as a shield against excessive taxation for the company.

Grammatical Forms of depletion allowance

• plural: depletion allowances
• comparative: more depletion allowance
• superlative: most depletion allowance
• present tense: depletion allowance
• future tense: will deplete allowance
• perfect tense: has depleted allowance
• continuous tense: is depleting allowance
• singular: depletion allowance
• positive degree: depletion allowance
• infinitive: to deplete allowance
• gerund: depleting allowance
• participle: depleted allowance

Origin and Evolution of depletion allowance

First Known Use: 1926 year

Language of Origin: English

Story behind the word: The term 'depletion allowance' originated in the United States tax code to refer to a tax deduction given to mining and oil companies to account for the depletion of natural resources.

Evolution of the word: Initially used specifically in the context of tax law, the term 'depletion allowance' has since evolved to encompass a broader range of industries and resources where depletion of assets occurs.