Under the depletion allowance method in computing depreciation, the depletion charge is equal to either ______ whichever is smaller.

• A. 50% of the fixed percentage of gross income or the net taxable income
• B. Fixed percentage of gross income or 50% of the net taxable income
• C. Fixed percentage of gross income or the net taxable income
• D. 50% of the fixed percentage of gross income or 50% of the net taxable income

Answer: (B)