TurboTax is indicating a problem because depletion cannot exceed basis.
Percentage depletion has one major advantage over cost depletion: it is possible to claim aggregate depletion deductions that exceed your basis. That means you get a deduction even after you have expensed the entire basis.
When your percentage depletion exceeds your basis, a basis increase is allowed.
So, your basis is increased to match the amount of allowable depletion.
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