depletion allowance
Definitions from Case Law · United States Supreme Court
Definitions from Case Law
From 350 U.S. 308 - Commissioner v. Southwest Exploration Co. · 1956Most cited · 789 citing opinions
a fixed percentage of gross income which Congress allows to be excluded; this exclusion is designed to permit a recoupment of the owner's capital investment in the minerals so that when the minerals are exhausted, the owner's capital is unimpaired
How the Supreme Court has restated “depletion allowance”
Each Supreme Court definition of “depletion allowance,” sized by how often later courts cited it. “Change” is measured by wording overlap with earlier definitions — a rough signal, not a semantic judgment.
How often courts cite the cases defining “depletion allowance”
Court decisions citing the 5 opinions that defined “depletion allowance” — 1,907 in all, by decade. Counts are citations to the defining cases as a whole, not verified uses of the term. The dip in the most recent years is a data-coverage gap, not a real trend — our corpus holds fewer opinions from the latest years.
All 5 definitions, chronological · 1932–1965
- ORIGINAL
when the execution of an oil and gas lease is followed by production of oil, the bonus and royalties paid to the lessor both involve at least some return of his capital investment in oil in the ground, for which a depletion allowance must be made
To withhold from a public utility the privilege of including a depletion allowance among its operating expenses, while confining it to a return of 6 1/2 per cent. upon the value of its wasting assets, is to take its property away from it without due process of law, at least where the waste is inevitable and rapid.
The deduction is permitted as an act of grace. It is permitted in recognition of the fact that the mineral deposits are wasting assets and is intended as compensation to the owner for the part used up in production.
the purpose of the allowance for depletion is to compensate the owner of wasting mineral assets for the part exhausted in production, so that when the minerals are gone, the owner's capital and his capital assets remain unimpaired.