Guanacevi Mining Co. v. Commissioner
United States Board of Tax Appeals
1. Expenditures for tunnels, equipment, and a mill necessary to extract ore profitably from a mine previously worked by primitive methods, held, a capital investment recoverable through depletion allowances and not a deductible operating expense. 2. Interest paid on borrowings for the development of a mine, held, to reduce the net income of the property for purposes of computing the deduction for percentage depletion.
Read the full summary
1. Expenditures for tunnels, equipment, and a mill necessary to extract ore profitably from a mine previously worked by primitive methods, held, a capital investment recoverable through depletion allowances and not a deductible operating expense. 2. Interest paid on borrowings for the development of a mine, held, to reduce the net income of the property for purposes of computing the deduction for percentage depletion. Mirabel Quicksilver Co.,41 B.T.A. 401, followed. 3. No credit under section 26(c)(1), Revenue Act of 1936, is available to a taxpayer because the payment of a dividend was…
1Opinion of the Court
*518OPINION.
Sternhagen :
1. On its income tax returns for 1935, 1936, and 1937 petitioner claimed as deductible mining expense $27,027.11, $31,971.93, and $34,936.20, respectively, representing an apportionment of its expenditures for mill, tunnels, and operating devices based on the amount of ore extracted in each year. The Commissioner disallowed these deductions on the ground that the expenditures “should be capitalized and recovered through deduction for depletion.”
The petitioner treats the tunnels, mill, and equipment as if they were facilities acquired during normal production for the…
2Cases cited2 opinions
- Helvering v. Northwest Steel Rolling Mills, Inc.Supreme Court of the United States · 1940
- Crane-Johnson Co. v. HelveringSupreme Court of the United States · 1940
3Cited by12 opinions
- Kennecott Copper Corporation v. The United StatesUnited States Court of Claims · 1965
- Geoghegan & Mathis, Inc. v. CommissionerUnited States Tax Court · 1971
- Guanacevi Mining Co. v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1942
- Alsted Coal Co. v. YokeCourt of Appeals for the Fourth Circuit · 1952
- H. G. Fenton Material Co. v. CommissionerUnited States Tax Court · 1980
7 more not listed; retrieve them via the Exa API.