The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1918-02-21
Regulations Governing Collection of Ex-
cess Profits Tax From Mining Companies

m winning NOHlkSolAACS
or sale was made represented the ac-
tual market value of the property sold,
due weight will be given to the re-
lationship or connection existing De-
tween the party or parties selling the
property and the buyer thereof.
Records to BE Kept.
Every individual or corporation
claiming and making deduction for
depletion of natural deposits shall keep
an accurate ledger account, in which
shall be charged the fair market value
as Of March /, 1913, or the cost, 1t
the property was acquired subsequent
to that date, of the mineral deposits
] involved. This account shall be cred
tied with the amount Of the depletion
deduction claimed and allowed each
year, or the amount of the depletion
shall be credited to a depletion re-
serve account, to the end that when
the sum of the credits for depletion
4 EQUALS the value or cost of the prop
erty no further deduction for depletion
with respect to this property. will be
allowed. The value determined and
set up as of March /, 1913, or the cost
OF the property if acquired subsequent
to that date, will be the basis for de-
termining the depletion deduction for
all subsequent years during the own
ership under which the value was
fixed, and during such ownership there
can be no revaluation for the purpose
OF this deduction if it should be found
that the estimated quantity OF the
mineral deposit was understated at
the time the value was fixed or at
the time the property was acquired.
In cases wherein the quantity OF the
mineral deposit in the mine prior to
March /, 1913. cannot be estimated
with any degree of accuracy, it will
be necessary, if depletion deductions
are to be taken, for the individual or
the best information available, to ar
rive at the fair market value of the
property as of March |, 1913; that is,
, Its fair cash value en- bloc, If such
value is believed to be other than its
original cost, which value, during the
, period of ownership under which 1t
, was determined shall be final and
shall be charged to the property ac-
, count as hereinbefore indicated, and
, then, on the basis of the most prob
able number of units in the property
the per unit value shall be determined
as the basis for computing annual
, depletion allowances, this method and
allowances to be continued until, but
not beyond, the time when the value
as of March /, 1913, shall have been
extinguished.
When to Use Original Cost Basis.
The original cost of the mineral de-
posit may be taken as the basis for
computing annual depletion deductions
if the fair market value as of March l
1913, as hereinbefore required, cannot
2 be ascertained otherwise, allowance
being made for minerals which may
have been removed prior to that date
: In cases wherein mineral property
was acquired subsequent to March l
S 1918, the same rule for computing the
r annual depletion will apply, excep,
e that in such case the basis of the
y computation will be the actual cost
e rather than the value as of March l
t 1918.
e A lessee corporation is not entitled
e to any depletion deduction as such
but if such lessee, in addition to roy.
\ alties, pays a stipulated sum for thu
: right to explore, develop and operate
ably over the estimated number Of
$ units in the mine, and thus ascertain
= the amount of invested capital OF
e bonus payment applicable to eacf
: unit The per unit cost thus ascer.
!, tanned will be multiplied by the num-
S Der of units removed from the mine
r during any one year and the result
: will be the amount that may be de-
s Quoted from the gross income of thai
: year as a return of the capital invest
: ed. In the case of both mine owner
and lessee no deduction for depletion
or return of capital will be allowed
when the invested capital has through
\ the aggregate of all such deductions
e been extinguished,
,
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