Federal Income Tax Affecting the Mining and Petroleum Industries
AbstractMr. McDonald outlines and analyzes the tax changes in the 1972 Income Tax Act with respect to the Petroleum and Mining Industries. The major emphasis of the article has been placed on an examination of changes in regard to deduction of exploration and development expenses; the purchase and dis position (actual and deemed) of resource properties; the phasing out of per centage depletion allowances plus an explanation and evaluation of its subsequent substitute—"earned depletion" allowances; the changes in tax legislation in respect to new mines (most notably the elimination of the 36 month tax holiday); and the taxation of oil and gas drilling funds (limited partnerships). The article also provides a thorough coverage of minor tax alterations affecting these industries, for example, definitions which have been changed under the new Act; provincial tax abatements; prospectors and grubstakers; amalgamations; etc.
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