In accounting for income taxes, percentage depletion in excess of cost depletion is an example of

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Percentage depletion in excess of cost depletion is a permanent difference because it originates from the difference between the tax basis (percentage depletion) and the book basis (cost depletion) of a natural resource. This difference is expected to be permanent and not reverse over time, and therefore no future tax consequences arise from it. This means that it does not require any intraperiod or interperiod income tax allocation.

In Accounting for Income Taxes, Percentage Depletion in Excess of Cost