Stouts Mountain Coal Co. v. Commissioner
United States Board of Tax Appeals
A corporation owning and operating a mine and claiming a deduction from gross income of an amount for depletion based upon an estimated tonnage of coal in place, and the mine becoming completely exhausted during one of the taxable years under review, thereby proving that the number of tons of coal in place was substantially less than the estimated number of tons upon which the claim for depletion for earlier years was based, is entitled to have its claim for depletion for…
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A corporation owning and operating a mine and claiming a deduction from gross income of an amount for depletion based upon an estimated tonnage of coal in place, and the mine becoming completely exhausted during one of the taxable years under review, thereby proving that the number of tons of coal in place was substantially less than the estimated number of tons upon which the claim for depletion for earlier years was based, is entitled to have its claim for depletion for the year in which the mine was exhausted revised and to have the undepleted cost of the coal in place at the beginning of…
1Opinion of the Court
*1293OPINION.
Smith:
The taxing statute permits a taxpayer to deduct from gross income—
In the case of mines, * * * a reasonable allowance for depletion and for depreciation of improvements, according to the peculiar conditions in each *1294case, based upon cost including cost of development not otherwise deducted: * * * Section 234 (a) (9), Revenue Act of 1918.
A reasonable allowance must be made for depletion in accordance with the facts in a given case. At the time the petitioner started operations, and during the year 1920, it believed that the recoverable tons of coal in its property were 400,000. It…
2Cited by3 opinions
- Wylie v. United StatesDistrict Court, N.D. Texas · 1968
- Stouts Mountain Coal Co. v. CommissionerUnited States Board of Tax Appeals · 1926
- Thomas Coal Co. v. CommissionerUnited States Board of Tax Appeals · 1928