Drilling costs join wear and tear in reducing the figure
What the document says“any deduction allowed for expenses under section 263(c) (including any deduction for such expenses under section 59(e) or 291(b)(2)) with respect to property described therein to the extent of the amount allowed as deductions in computing taxable income for the year, and”
The section rewrites subparagraph (A) of section 56A(c)(13) of the Internal Revenue Code of 1986 so that the figure is reduced both by depreciation deductions under section 167 for property to which section 168 applies and by deductions for intangible drilling and development costs under section 263(c), in each case to the extent allowed in computing taxable income. It also rewrites clause (i) of subparagraph (B) so that both depreciation expense and depletion expense tied to those drilling costs are disregarded on the applicable financial statement.
What the document actually says“any deduction allowed for expenses under section 263(c) (including any deduction for such expenses under section 59(e) or 291(b)(2)) with respect to property described therein to the extent of the amount allowed as deductions in computing taxable income for the year, and”
Drilling costs may be taken off the figure. Only the part allowed for normal tax counts.
Wear and tear is treated the same way. The matching book expenses are set aside. That stops the same cost counting twice.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.