Show MINE DEPLETION AND TAXES boston news bureau Bur bau one feature qt of I 1 the income tax law which valc h has produced almost endless complaint is allowance for depletion more liberal treatment was accorded this subject in the 1916 and 1917 laws than in the 1913 law but present provisions are far from satisfactory under the law as it now stands there is permitted in the case of mines a reasonable allowance for depletion thereof not to exceed the market value in the mine of the product thereof which has been mined and sold during the year for which the return and computation are made under construction st placed upon this law by the treasury no deduction is permitted to a mine owner by way of depletion out of advance royalties received by him for ore to be thereafter mined and removed under lease when the operator of the mine applies such advance royalties in payment for an ail equivalent amount of ore subsequently removed by him owner of mine receives no money from which he can make a depletion deduction on account of the ore so taken out As a consequence his capital represented by such ore is not received by him tax tree free but is treated as income inco in e by the government and is accordingly subjected eted to both income and excess profits taxes should the mining contract be terminated for any reason before the ore paid for in advance has been removed the mine mille owner would then be obliged to report such advance royalty payments as income for the year the termination occurred precisely as in all other cases of advance payments on contracts as provided for in article no of regulation no 33 to remedy this situation mine owners have suggested the following amendment a in the case of oil and gas wells a reasonable allowance for actual reduction in flow and production to be ascertained not by the flush flow but by the settled production or regular flow b in the case of mines an allowance for depletion thereof equal to but not exceeding the market value in the mine of the ore content thereof which has been mined and sold during the year for which the return and computation are made or if the mine be operated or controlled under a mining contract in any form by another than the owner an allowance equal to but not exceeding the market value in the mine of the ore content thereof which has been mined and removed or for which compensation has been made in accordance with the contract in advance of mining during such year such allowances to be made in the case of both a and b so all parties interested therein including owners lessor lessons and les sees to the extent of the value of their respective spec tive rights or interests therein under rules and regulations to be prescribed by secretary of treasury provided that if the mine was acquired prior to march 1 1912 whenever the sum of such annual allowances shall equal the market value of the same as of that date or if the mine was acquired after said date whenever the sums of such allowance shall equal a the actual cash paid or b the actual cash value at the time of payment thereof of tangible prop erty other than cash paid or C CJ is acquired otherwise than by purchase the I 1 actual cash value of the mine at th the e time of such acquisition then no further allowance shall be made for ally an y no deduction shall be allowed pernia per amount paid out for new buildings made to nent improvements or betterments estate es a increase the value of any property or for a and no deduction shall be made amount of expense of restoring pro or for making good the exhaustion thereof which an allowance is or has been made |