- 36 -
such, Congress specifically provided the starting point whereby
taxable income from the property must be determined under section
613(a), and, by doing so, Congress adopted the focus on income
and expenses of individual properties historically applied under
section 613.
Taxable income from the property, pursuant to section 1.613-
5(a), Income Tax Regs., is defined as "gross income from the
property" (as defined in section 613(c) and sections 1.613-3 and
1.613-4, Income Tax Regs.) less:
all allowable deductions (excluding any deduction for
depletion) which are attributable to mining processes,
including mining transportation, with respect to which
depletion is claimed. These deductible items include
operating expenses, certain selling expenses,
administrative and financial overhead, depreciation,
taxes deductible under section 162 or 164, losses
sustained, intangible drilling and development * * *
expenditures, etc. * * * Expenditures which may be
attributable both to the mineral property upon which
depletion is claimed and to other activities shall be
properly apportioned to the mineral property and to
such other activities. Furthermore, where a taxpayer
has more than one mineral property, deductions which
are not directly attributable to a specific mineral
property shall be properly apportioned among the
several properties. * * *
Accordingly, section 1.613-5(a), Income Tax Regs., controls the
computation of the NIL for both percentage depletion and WPT
purposes.
17(...continued)
determined under section 613(a). [Emphasis added.]
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