562
Opinion of the Court
"(i) Amounts recoverable through depreciation deductions, through deferred expenses, and through deductions other than depletion, and
"(ii) The residual value of land and improvements at the end of operations." Treas. Reg. § 1.612-1(b)(1).
This, of course, is exactly the conclusion in the case of percentage depletion that we have reached after a long detour through § 1016. Section 1.612-1(b)(1) applies by its terms, however, only to the determination of mineral deposit basis for the purpose of calculating cost depletion; and the title of § 1.612-1(b) is "Special rules." Therefore, reason the Hills, the "general rule" for determining mineral deposit basis under § 1016 must include the items, such as "[a]mounts recoverable through depreciation deductions," excluded in the "special rule." But this argument proves too much. If the Hills stuck to their logic, they would have to claim that they could also add "[t]he residual value of land and improvements at the end of operations" to their bases in their mineral deposit interests, an absurdity that they cannot, and do not try to, support. The simple answer is that when an arguable suggestion of the title of one subsection of a regulation is pitted against the entire Code framework for determining basis, the Code wins, and the title is at most an infelicity.
The infelicity is understandable here. The calculation of percentage depletion is unconnected to the concept of basis; the annual percentage depletion deduction is not measured in relation to basis, nor are the cumulative deductions limited by basis. See 26 U. S. C. § 613 (1976 ed. and Supp. V). The concepts of basis and percentage depletion meet only in the minimum tax provisions, for the purpose of calculating the item of tax preference in § 57(a)(8). Since § 1.612-1(b)(1) was issued long before the minimum tax was enacted, see 25 Fed. Reg. 11801 (1960); Pub. L. 91-172, § 301, 83 Stat. 580, that regulation's reference to a "special rule" for "cost" depletion cannot have been intended to indicate that some
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