Title 15 . Revenue

Chapter 21 . (Repealed)

Section 630. Expenses and net operating losses under the old tax

15 AAC 21.630. Expenses and net operating losses under the old tax

(a) To avoid double deductions with respect to a taxpayer's acquisition costs and development costs for a lease or property that were incurred before the taxpayer became subject to tax under AS 43.21 and this chapter, and to insure equitable treatment among taxpayers

(1) the taxpayer's unamortized acquisition costs for the lease or property must be reduced by the taxpayer's standardized prior-tax amortization for that lease or property, as provided in 15 AAC 21.250(e) ; and

(2) the taxpayer's undepreciated development costs for the lease or property must be reduced by the taxpayer's standardized prior-tax depreciation for that lease or property, as provided in 15 AAC 21.260(f) .

(b) For purposes of this chapter, a taxpayer's "standardized prior-tax amortization" means the amount, presumed to have been already deducted under AS 43.20 and 15 AAC 20, which equals the lesser of

(1) an amount equal to AC

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where AC equals the taxpayer's total acquisition costs for the lease or property as of the new-tax commencement date for that taxpayer, P equals the Btu-equivalents of the production from (or allocated to) the lease or property before that new-tax commencement date, and R equals the Btu-equivalents represented by the remaining proved reserves (both developed and undeveloped) of the lease or property as of that new-tax commencement date; and

(2) the amount of the taxpayer's acquisition costs for the lease or property which the taxpayer demonstrates, to the department's satisfaction, as having been actually deducted on the taxpayer's reports filed under AS 43.20 and 15 AAC 20.

(c) For purposes of this chapter, a taxpayer's "standardized prior-tax depreciation" means the amount, presumed to have been deducted under AS 43.20 and 15 AAC 20, which equals the lesser of

(1) an amount equal to DC

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where DC equals the taxpayer's total development costs for the lease or property as of the new-tax commencement date for that taxpayer, P equals the Btu-equivalents of the production from (or allocated to) the lease or property before that new-tax commencement date, and DR equals the Btu-equivalents represented by the remaining proved developed reserves of the lease or property as of that new-tax commencement date; and

(2) the amount of the taxpayer's development costs for the lease or property which the taxpayer demonstrates, to the department's satisfaction, as having been actually deducted on the taxpayer's reports filed under AS 43.20 and 15 AAC 20.

(d) Repealed 3/26/82.

(e) For purposes of this chapter, the "new-tax commencement date" for a particular taxpayer is January 1, 1978 or, if the taxpayer had not begun deriving income from a source specified in 15 AAC 21.010 before January 1, 1978, the date when the taxpayer does begin deriving income from such a source.

History: Eff. 2/22/79, Register 69; am 3/26/82, Register 81

Authority: AS 43.05.080

AS 43.21.080

AS 43.21.090