S/V Drilling Partners, Snyder Armclar Gas Company, Tax Matters Partners - Page 8




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          equivalent (before any indexing for inflation).  That report                
          states in pertinent part that the credit:                                   
               would be equal to $3 for the production of an amount of                
               energy equivalent to that contained in a barrel of                     
               crude oil, and all energy equivalent measurements would                
               be made on the basis of Btu content.  Therefore, a $3                  
               credit would be allowed for the production of 5.8                      
               million Btu’s of energy.                                               
                          *    *    *    *    *    *    *                             
               The credit would be $3 for the production of 5.8                       
               million Btu’s * * * .                                                  
          S. Rept. 96-394, at 87, 89 (1979), 1980-3 C.B. 131, 205, 207.               
               Similarly, the conference report states in pertinent part              
          that the “credit is $3 for the production of each unit of 5.8               
          million Btus of energy, the equivalent of one barrel of oil”.  H.           
          Conf. Rept. 96-817, at 140 (1980), 1980-3 C.B. 245, 300.                    
               The Senate bill also provided a formula to determine the               
          entitlement to the credit for taxpayers with a fractional                   
          interest in the property:                                                   
               Production from a property shall be attributed to the                  
               taxpayer for the taxable year in an amount which bears                 
               the same ratio to the total sales during such year of                  
               qualified fuels from such property as the amount of the                
               taxpayer’s gross income from such property for such                    
               year from such sales bears to the aggregate gross                      
               income from such property for such year from such                      
               sales.  [Crude Oil Windfall Profit Tax Act of 1979,                    
               H.R. 3919, sec. 251, 96th Cong., proposing new I.R.C.                  
               sec. 44D(3)(3)(A).]                                                    
               Thus, the committee reports, as well as section 29, show               
          that Congress intended the credit to be based on the barrel of              







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