How Do You Spell DEPLETION ALLOWANCE?

Pronunciation: [dɪplˈiːʃən ɐlˈa͡ʊəns] (IPA)

Depletion allowance is a term used in finance to describe the tax deduction provided to companies that extract natural resources. The spelling of this word is fairly straightforward - dɪˈpliːʃən əˈlaʊəns. The stress is on the second syllable of depletion and the first syllable of allowance. The letter combination "ea" in allowance is pronounced as /ə/. This term is important in the context of natural resource extraction as it provides companies with a financial incentive to continue to extract resources that are becoming scarcer over time.

DEPLETION ALLOWANCE Meaning and Definition

1. Depletion allowance refers to a tax deduction or an allowance given to individuals or businesses engaged in extracting or depleting natural resources, such as oil, gas, minerals, timber, or even underground water, as part of their operations.

   The depletion allowance is typically granted as a compensation for the reduction or depletion of these natural resources over time. It recognizes that extracting these resources diminishes their availability and overall value, and seeks to offset the potential economic impact on the businesses involved.

   The allowance is based on a percentage of the gross income derived from the sale of these natural resources and is calculated to account for the reduction in the reserves. It is intended to compensate the business for the loss in value associated with depleting the resources, as well as to encourage continued production.

   The depletion allowance is commonly used in the energy, mining, and forestry industries. It serves as an incentive for businesses to invest in exploration, extraction, and production activities, as it can reduce the overall tax liability. By providing a tax deduction for the depletion of natural resources, the government aims to stimulate economic growth in these sectors and promote the efficient exploration and extraction of such resources.

Common Misspellings for DEPLETION ALLOWANCE

• sepletion allowance
• xepletion allowance
• cepletion allowance
• fepletion allowance
• repletion allowance
• eepletion allowance
• dwpletion allowance
• dspletion allowance
• ddpletion allowance
• drpletion allowance
• d4pletion allowance
• d3pletion allowance
• deoletion allowance
• delletion allowance
• de-letion allowance
• de0letion allowance
• depketion allowance
• deppetion allowance
• depoetion allowance
• deplwtion allowance

Etymology of DEPLETION ALLOWANCE

The term "depletion allowance" originated in the field of economics and taxation and refers to a tax benefit or deduction provided to individuals or companies engaged in the extraction or depletion of natural resources. The etymology of this term can be understood by examining the individual words within it:

1. Depletion: The noun "depletion" stems from the verb "deplete", which originated from the Latin word "deplēre" meaning "to empty out", "to exhaust", or "to use up completely". It has been used in the English language since the 1800s and is commonly associated with the concept of gradually reducing or exhausting a finite resource.

2. Allowance: The noun "allowance" comes from the Old French word "aloncier", which means "to assign" or "to give".

Plural form of DEPLETION ALLOWANCE is DEPLETION ALLOWANCES