Charles Purchases an Interest in a Uranium Mine for $2,500,000

question 33

Multiple Choice

Charles purchases an interest in a uranium mine for $2,500,000 on June 7,2016.Recoverable tonnage is estimated at 500,000.During 2016,25,000 tons are mined and sold for $800,000.Charles incurs $500,000 of expenses during 2016.The percentage depletion rate for uranium is 22%.What is the depletion deduction for 2016?

• A)$125,000
• B)$150,000
• C)$176,000
• D)$200,000
• E)$250,000

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