Jewel Mining Co. v. Commissioner

Petitioner in 1930 leased coal mining rights in a tract of land and subsequently, before the taxable year, subleased these rights in a portion of the acreage covered by the original lease, reserving certain royalties. Mining operations were carried on during the taxable year by the sublessee and the petitioner, each on the land of which it was the ultimate lessee. Petitioner treated income from its own operations and royalties from its sublessee as income from a single property in computing depletion. Held, petitioner has properly treated the income from the two sources as arising from a…