Hanna Iron Ore Co. v. Commissioner of Internal Revenue

STALEY, Circuit Judge.

Petitioner asked the Tax Court to hold that expenses incurred in stripping the overburden from an open-pit iron ore mine, before any ore was removed from the mine, were deferred mining expenses, recoverable by deduction from the in come produced by the sale of the ore thus uncovered and removed, rather than development expenses, chargeable to capital and recoverable through depletion. The Tax Court 1 declined to do so, and the case comes here. Petitioner’s income tax liability for the taxable year 1944 is in question.

We take the necessary facts from the parties’…