Page:United States Statutes at Large Volume 72 Part 1.djvu/1676

 1634 26 USC 614.

PUBLIC LAW 86-866-SEPT. 2, 1968 (b) 1958 RULES FOR MiNERAL INTERESTS I N M i N E S.

[72 S T A T. Sectioil 614

(relating to definition of property for purposes of computing depletion allowance) is amended by redesignating subsection (c) as (e), and by inserting after subsection (b) the following new subsection: " (c) 1958 SPECIAL RULES AS TO OPERATING MINERAL INTERESTS I N MINES.— " (1) ELECTION TO AGGREGATE SEPARATE INTERESTS.—Except in

the case of oil and ^as wells, if a taxpayer 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 an aggregation of, and to treat as one property, all such interests owned by him which comprise any one mine or any two or more mines; and " (B) to treat as a separate property each such interest which is not included within an aggregation referred to in subparagraph (A). For purposes of this paragraph, 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. For purposes of this paragraph, a taxpayer may elect to form more than one aggregation of operating mineral interests within any one operating unit; but no aggregation may include any operating mineral interest which is a part of a mine without including all of the operating mineral interests which are a part of such mine in the first taxable year for which the election to aggregate is effective, and any operating mineral interest which thereafter becomes a part of such mine shall be included in such aggregation. " (2) ELECTION TO TREAT A SINGLE INTEREST AS MORE THAN ONE

PROPERTY.—Except in the case of oil and gas wells, if a single tract or parcel of land contains a mineral deposit which is being extracted, or will be extracted, by means of two or more mines for which expenditures for development or operation have been made by the taxpayer, then the taxpayer may elect to allocate to such mines, under regulations prescribed by the Secretary or his delegate, all of the tract or parcel of land and of the mineral deposit contained therein, and to treat as a separate property that portion of the tract or parcel of land and of the mineral deposit so allocated to each mine. A separate property formed pursuant to an election under this paragraph shall be treated as a separate property for all purposes of this subtitle (including this paragraph). A separate property so formed may, under regulations prescribed by the Secretary or his delegate, be included as a part of an aggregation in accordance with paragraphs (1) and (3), but the provisions of paragraph (4) shall not apply with respect to such separate property. The election provided by this paragraph may not be made with respect to any property which is a part of an aggregation formed by the taxpayer under paragraph (1) except with the consent of the Secretary or his delegate. " (3) M A N N E R AND S C O P E OF ELECTION. —

" (A) IN GENERAL.—Except as provided in subparagraph (D), 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 tax-

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