(a) Section 167(g) of the Internal Revenue Code, relating to depreciation under income forecast method, shall be modified as follows:
(1) Section 167(g)(2)(C) of the Internal Revenue Code is modified by substituting “Section 19521” for “Section 460(b)(7)” of the Internal Revenue Code.
(2) Section 167(g)(5)(D) of the Internal Revenue Code is modified by substituting “Part 10.2 (commencing with Section 18401) (other than Section 19136)” for “Subtitle F (other than Sections 6654 and 6655).”
(3) Section 167(g)(5)(E) of the Internal Revenue Code, relating to treatment of distribution costs, shall not apply.
(4) Section 167(g)(7) of the Internal Revenue Code, relating to treatment of participations and residuals, shall not apply.
(b) Section 167(h) of the Internal Revenue Code, relating to amortization of geological and geophysical expenditures, shall not apply.
(Amended by Stats. 2010, Ch. 14, Sec. 20. (SB 401) Effective January 1, 2011.)