TREATMENT OF INTANGIBLE DRILLING COSTS FOR PURPOSES OF THE MINIMUM TAX.

SEC. 308. TREATMENT OF INTANGIBLE DRILLING COSTS FOR PURPOSES OF THE MINIMUM TAX. (a) In General.—Paragraph (11) of section 57(a) (relating to minimum tax) is amended to read as follows: “(11) Intangible drilling costs.— “(A) In general.—With respect to all oil and gas properties of the taxpayer, the amount (if any) by which the amount of the excess intangible drilling costs arising in the taxable year is greater than the amount of the net income of the taxpayer from oil and gas properties for the taxable year. 91 STAT. 154 “(B) Excess intangible drilling costs.—For purposes of subparagraph (A), the amount of the excess intangible drilling costs arising in the taxable year is the excess of— “(i) the intangible drilling and development costs described in section 263(c) paid or incurred in connection with oil and gas wells (other than costs incurred in drilling a nonproductive well) allowable under this chapter for the taxable year, over “(ii) the amount which would have been allowable for the taxable year if such costs had been capitalized and straight line recovery of intangibles (as defined in subsection (d)) had been used with respect to such costs. “(C) Net income from oil and gas properties.—For purposes of subparagraph (A), the amount of the net income of the taxpayer from oil and gas properties for the taxable year is the excess of— “(i) the aggregate amount of gross income (within the meaning of section 613(a)) from all oil and gas properties of the taxpayer received or accrued by the taxpayer during the taxable year, over “(ii) the amount of any deductions allocable to such properties reduced by the excess described in subparagraph (B) for such taxable year.” (b) Effective Date.—The amendment made by subsection (a) shall apply with respect to taxable years beginning after December 31, 1976, and before January 1, 1978.