No CRS summary available for this bill.
This section modifies the percentage depletion allowance for marginal oil and gas properties (i.e., low-production wells), effective for taxable years beginning after December 31, 2026, by (1) revising the applicable percentage rate under IRC §613A(c)(6)(C) to 15% plus 1 percentage point for each whole dollar by which $70 exceeds the reference price for crude oil for the prior calendar year (capped at 25%), with the $70 amount increased after 2027 by the Producer Price Index for Drilling Oil and Gas Wells; (2) eliminating the taxable income limitations under IRC §§613(a) and 613A(d)(1) for such depletion (thus, the deduction may exceed 100% of net income from the property); and (3) increasing the depletable oil quantity threshold under IRC §613A(c)(3)(B) to 2,000 barrels (from 1,000 barrels), allowing higher-production properties to qualify as marginal.