The Impact of the Domestic Production Deduction on Domestic Oil and Gas Exploration and Production Partnerships
Robert D. Pulliam, Sandy Frost, and William H. Wilson
Provision 102 of the American Jobs Creation Act of 2004 (AJCA) added a new deduction based on domestic production activities. Internal Revenue Code (IRC) § 199 implements the domestic production deduction, and the domestic upstream segment of the oil and gas industry should benefit from this. There are, however, many unanswered questions regarding how this deduction will impact oil and gas partnerships. Caution should be exercised in rearranging business affairs to obtain or maximize the IRC § 199 deduction. Other tax and business issues may outweigh the desirability of taking the IRC § 199 deduction.
The Impact of the Domestic Production Deduction on Domestic Oil and Gas Exploration and Production Partnerships. Pulliam, Robert D.; Frost, Sandy; and Wilson, William H., Summer 2005, pp. 31‑45.