Roger Muldavin, et al. - Page 9

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          an amount equal to any rents or royalties paid or incurred by the           
          taxpayer in respect of the property".  Secs. 613(a), 613A(c)(1).            
               It has long been decided that the "gross income from the               
          property" is the gross income from the property received by the             
          taxpayer claiming the deduction for depletion.  Helvering v.                
          Mountain Producers Corp., 303 U.S. 376, 382 (1938); Helvering v.            
          Twin Bell Oil Syndicate, 293 U.S. 312 (1934); McLean v.                     
          Commissioner, 41 B.T.A. 565, 575 (1940), affd. 120 F.2d 942 (5th            
          Cir. 1941).  Accordingly, for purposes of computing the amount of           
          average daily production to which the depletion allowance will              
          apply, section 613A(c)(2) provides that the average daily                   
          production for a taxpayer with a partial interest is equal to the           
          total production of the property times the taxpayer's percentage            
          participation in the revenue from such property.                            
               Applying the foregoing statutory provisions, it is clear               
          that, where more than one taxpayer is involved, the depletion               
          allowance for any one taxpayer cannot be calculated on the gross            
          income from the property as a whole, since the allowance must be            
          apportioned equitably in keeping with the respective interests of           
          lessor and lessee.  Helvering v. Twin Bell Oil Syndicate, supra;            
          Callahan Mining Corp. v. Commissioner, 51 T.C. 1005, 1020 (1969),           
          affd. 428 F.2d 721 (2d Cir. 1970); cf. sec. 613A(c)(2).  Thus,              
          petitioners' argument based on their title to the land is without           

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