The Kusko times., 1925-11-28
TAXABLE STATUS OF INCOME
 DERIVED FROM OPERATION
 OF GOLD MINING PROPERTY
(Fairbanks News-Miner.)

The Treasury Department is after us for statement we published last September as to the status of gold and the gold digger According to the department, while gold is exempt from taxation, the fellow who takes it out of the ground, generally at a loss, to himself, can be taxed to the limit. One such miner is being bumped" for such taxes today in Our Town to the tune of S9,000:
 Treasury Department, Washington, April 14.-Fairbanks Daily News Miner, Fairbanks, Alaska; Sirs-
 Reference is made to an article published in the September 20. 1924, issue of the Fairbanks Daily News Miner, relative to the taxable status of income derived from the operation or safe of gold mining property.
 It was stated in the article in question chat ''gold mining is exempt from income tax" and that. many mining men are under the impression that they. are required to and actu- ally have paid income taxes on gold mined by them" The following que tations from the article, when read in connection with the preceding state. ments, is likely to be misconstrued as exempting income derived from, min ing from income tax, whereas it re- lates to the exemption from the war profits and excess profits tax only:
 '"'War profits, and excess profits tax, Article 752, of the rules of 1920. reads:
 Net, income exempt from tax on gold. If corporation is engaged in the mining of gold the portion of it's net income derived from that source is exempt from tax"
 The statement to the effect that, in come derived from gold mining is ex- empt from income tax is, erroneous, as such income is not exempt from income tax under any of the revenue acts. Under the provisions of Sec tion BOA (c) of the revenue acts of 1918 and 1921, in the case of a<cor- poration engaged in the mining of gold, the pogtii3a Of the net income derived from the mining of gold is exempt from the war, excess profits tax imposed by Title II of the reve- nue act of 1917, and the war profits. and excess profits. tax imposed by Title Ill of the revenue acts of. 1918 and 1921.
 In the case of bona fide sale of mines or any interest therein. where the principal value of the property has been demonstrated by prospect. ing or exploration and discovery work done by the taxpayer, the portion of the surtax imposed by Section 211 of the revenue acts of 1918 and 1921 at tributable to such sale is limited by Section 211 (b) of such act to 20 per cent of the selling price of the prop erty or interest for the years 1918 to 1921 ,> inclusive, and to 16 per cent for the years 1922 and 1928. Section PIT (b) of the revenue act of 1924 pro- vides for a like limitation of 16 per, cent for 1924. and subsequent years. The war profits and excess profits tax i'm posed by Title III of the revenue acts of 1918 and 1921 is likewise lim- ited by Section 337 of such acts to 20 per cent of the selling price of such property or interest.
 In view of the erroneous nature of the article referred to, it is believed that this letter should be published for the information of your readers who are engaged in the gold mining business.
 Respectfully.
 G. J, Bright,