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mining the first layer of ore, but it also allows eventual
access to lower layers of ore. See Rev. Rul. 86-83,
supra. On the other hand, the costs incurred in removing
overburden in connection with a strip mine typically are
integrally related to extraction of a limited area of the
ore or mineral to be mined and, for that reason, are
included among the costs of producing a particular
increment of the ore or mineral. See Rev. Rul. 77-308,
supra; Rev. Rul. 67-169, supra.
Before 1983, development expenditures could be
deducted under section 616(a) without limitation.
Beginning in 1983, the current deduction of development
expenditures under section 616(a) in the case of a
corporation became subject to the special rules of section
291(b). As first enacted, section 291(b) provided in
pertinent part as follows:
SEC. 291(b). Special Rules for Treatment
of Intangible Drilling Costs and Mineral
Exploration and Development Costs.–-For purposes
of this subtitle, in the case of a corporation--
(1) In general.-–The amount allowable
as a deduction for any taxable year
(determined without regard to this section)
--
* * * * * * *
(B) under section 616(a) or 617,
shall be reduced by 15 percent.
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