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INTERNAL REVENUE CODE OF 19 5 4

(E) the pulverization of talc, the burning of magnesite, and the sintering and nodulizing of phosphate rock. SEC. 614. DEFINITION OF PROPERTY. (a) GENERAL RULE. — For the purpose of computing the depletiooi allowance in the case of mines, wells, and other natural deposits, the term "property" means each separate interest owned by the taxpayer in each mineral deposit in each separate tract or parcel of land. (b) SPECIAL RULE AS TO OPERATING M I N E R A L I N T E R E S T S. — (1) ELECTION TO AGGREGATE SEPARATE INTERESTS.—If a tax-

payer owns two or more separate operating mineral interests which constitute part or all of an operating unit, he may elect (for all purposes of this subtitle)— (A) to form one aggregation of, and to treat as one property, any two or more of such interests; and (B) to treat as a separate property each such interest which he does not elect to include within the aggregation referred to in subparagraph (A). For purposes of the preceding sentence, separate operating mineral interests which constitute part or all of an operating unit may be aggregated whether or not they are included in a single tract or parcel of land and whether or not they are included in contiguous tracts or parcels. A taxpayer may not elect to form more than one aggregation of operating mineral interests within any one operating unit. (2) M A N N E R AND SCOPE OF ELECTION.—The election provided

by paragraph (1) shall be made, for each operating mineral interest in accordance with regulations prescribed by the Secretary or his delegate, not later than the time prescribed by law for filing the return (including extensions thereof) for whichever of the following taxable years is the later: The first taxable year beginning after December 31, 1953, or the first taxable year in which any expenditure for exploration, development, or operation in respect of the separate operating mineral interest is made by the taxpayer after the acquisition of such interest. Such an election shall be binding upon the taxpayer for all subsequent taxable years, except that the Secretary or his delegate may consent to a different treatment of the interest with respect to which the election has been made. (3) OPERATING MINERAL INTERESTS DEFINED.—For purposes of this subsection, the term "operating mineral interest" includes only an interest in respect of which the costs of production of the mineral are required to be taken into account by the taxpayer for purposes of computing the 50 percent limitation provided for in section 613, or would be so required if the mine, well, or other natural deposit were in the production stage. (c) SPECIAL RULE AS TO NONOPERATING M I N E R A L I N T E R E S T S. — (1) AGGREGATION OF SEPARATE INTERESTS.—If a taxpayer owns

two or more separate nonoperating mineral interests in a single tract or parcel of land, or in two or more contiguous tracts or parcels of land, the Secretary or his delegate may, on showing of undue hardship, permit the taxpayer to treat (for all purposes of this subtitle) all such mineral interests as one property. If such § 613(c)(4)(E)

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