Eula Owns a Mineral Property That Had a Basis of $23,000

question 49

Multiple Choice

Eula owns a mineral property that had a basis of $23,000 at the beginning of the year.Cost depletion is $19,000.The property qualifies for a 15% depletion rate.Gross income from the property was $200,000 and net income before the percentage depletion deduction was $50,000.What is Eula's tax preference for excess depletion?

• A)$15,000.
• B)$23,000.
• C)$25,000.
• D)$0.
• E)None of the above.

---

Definitions:

Autokinetic Illusion

A visual perception phenomenon where a static light in a dark room appears to move because of small involuntary eye movements.

Tiny

A term used to describe something that is very small in size.

Constantly Shining Light

A continuous and uninterrupted emission of light from a source.

Monaural Clues

Auditory signals that can be perceived by one ear, helping in sound localization and identification.