Rick Purchased a Uranium Interest for $10,000,000 on January 3

question 109

Essay

Rick purchased a uranium interest for $10,000,000 on January 3, 2012, when recoverable reserves were estimated at 200,000 units.A total of 10,000 units were extracted in 2012 and 7,000 units were sold in 2012.Gross income from the property was $2,800,000 and taxable income without the allowance for depletion was $1,000,000.Determine the depletion deduction for 2012.

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Definitions:

Revealed Preference

A theory that determines a consumer's preferences based on their purchasing behavior, under the assumption that their choices reveal their valuation of goods.

Insurance Agent

A professional who sells, solicits, or negotiates insurance policies on behalf of an insurer.

Hours Worked

Hours worked refer to the total number of hours spent by an individual or aggregate workforce in performing their job duties within a specific period.

Eggplants

Edible fruits (commonly considered vegetables in culinary contexts) from the nightshade family, known for their glossy purple skin and meaty texture.