35 Miss. Code. R. 3-05-05-101
In the case of standing timber, the depletion allowance shall be computed solely upon the adjusted cost basis of the property. In the case of other exhaustible natural resources, the allowance for depletion shall be computed upon either the adjusted cost basis of the property (cost depletion) or upon a percentage of gross income from the property (percentage depletion), whichever results in the greater allowance for depletion for any taxable year, but in no case shall the aggregate deductions for depletion allowance exceed the cost basis of the property. In no case will depletion based upon discovery value be allowed. Unless cost of mineral deposits can be definitely determined and substantiated, a depletion deduction will not be allowed. Depletion is allowable only in connection with actual production. A depletion deduction is not allowed on lease bonus or lease rental income.
35 Miss. Code. R. 3-05-05-101