What backup paperwork does the IRS require in order to take the depletion allowance on oil royalties? I've read that 15% is the standard amount for oil--is there someplace on the IRS website that verifies that percentage?
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1 Replies
RobertB4444
Employee Tax Expert
Feb 20, 2026 10:34:21 AM
There is no required backup paperwork in order to take depletion on oil royalties. Using the percentage depletion method oil royalties automatically take a 15% deduction. Here is the IRS guidance on depletion.