SEC. 614-Continued (c) (added 1958)-Continued Do____. (heading in full, par. (5) repealed) (d)__ (added) Do.... (in full) (e) (1) _ _ _ . (1st sentence in full) Feb. 26, 1964, H.R. 8363, P.L. 88-272, § 226(b)(1), (2), 78 Stat. 96: (1) by amending the heading to read as follows: "(c) SPECIAL RULES AS TO OPERATING MINERAL INTERESTS IN MINES.-" (2) by repealing paragraph (5) (relating to the definition of operating mineral interests). Sept. 2, 1958, H.R. 8381, P.L. 85-866, § 37(c), 72 Stat. 1637: "(d) 1939 CODE TREATMENT WITH RESPECT TO OPERATING MINERAL INTERESTS IN CASE OF OIL AND GAS WELLS.-In the case of oil and gas wells, any taxpayer may treat any property (determined as if the Internal Revenue Code of 1939 continued to apply) as if subsections (a) and (b) had not been enacted. If any such treatment would constitute an aggregation under subsection (b), such treatment shall be taken into account in applying subsection (b) to other property of the taxpayer." Applicability: Taxable years beginning after December 31, 1953, and ending after August 16, 1954. (Id., § 37(e), 72 Stat. 1638.) Feb. 26, 1964, H.R. 8363, P.L. 88-272, § 226(b) (3), 78 Stat. 96: Amended Sec. 614(d) (as added by P.L. 85-866, § 37(c)) to read as follows: "(d) OPERATING MINERAL INTERESTS DEFINED.-For purposes of this section, the term 'operating mineral interest' includes only an interest in respect of which the costs of production of the mineral are required to be taken into account by the taxpayer for purposes of computing the 50 percent limitation provided for in section 613, or would be so required if the mine, well, or other natural deposit were in the production stage.' Applicability: Taxable years beginning after December 31, 1963. (Id., § 226(d), 78 Stat. 97.) Sept. 2, 1958, H.R. 8381, P.L. 85-866, § 37(d), 72 Stat. 1637: Amended the first sentence of paragraph (1) of Sec. 614(e) (former subsection (c) 187 relettered by P.L. 85-866, § 37(b) above) to read as follows: "If a taxpayer owns two or more separate nonoperating mineral interests in a single tract or parcel of land or in two or more adjacent 187 The original subsection (c) of section 614 read as follows (68A Stat. 210-211): "(c) SPECIAL RULE AS TO NONOPERATING MINERAL INTERESTS."(1) AGGREGATION OF SEPARATE INTERESTS.-If a taxpayer owns two or more separate nonoperating mineral interests in a single tract or parcel of land, or in two or more contiguous tracts or parcels of land, the Secretary or his delegate may, on showing of undue hardship, permit the taxpayer to treat (for all purposes of this subtitle) all such mineral interests as one property. If such permission is granted for any taxable year, the taxpayer shall treat such interests as one property for all subsequent taxable years unless the Secretary or his delegate consents to a different treatment. "(2) NONOPERATING MINERAL INTERESTS DEFINED.-For purposes of this subsection, the term 'nonoperating mineral interests' includes only interests which are not operating mineral interests within the meaning of subsection (b)(3).” 60-448-67-22 SEC. 614-Continued (e) (1) (redesignated 1958)-Continued (e) (2) (in part) tracts or parcels of land, the Secretary or his delegate shall, on showing by the taxpayer that a principal purpose is not the avoidance of tax, permit the taxpayer to treat (for all purposes of this subtitle) all such mineral interests in each separate kind of mineral deposit as one property." Applicability: Taxable years beginning after December 31, 1957, except that, at the election of any taxpayer, the amendment applies with respect to taxable years beginning after December 31, 1953, and ending after August 16, 1954. (Id., § 37(e), 72 Stat. 1638.) Feb. 26, 1964, H.R. 8363, P.L. 88-272, § 226(b) (4), 78 Stat. 96: Amended paragraph (2) of Sec. 614(e) (original subsection (c) redesignated by P.L. 85-866, § 37 (b)) by striking out "within the meaning subsection (b)(3)". Applicability: Taxable years beginning after December 31, 1963. ANCILLARY PROVISIONS: Feb. 26, 1964, H.R. 8363, P.L. 88-272, § 226(c), 78 Stat. 96-97: "(c) ALLOCATION OF BASIS IN CERTAIN CASES.-For purposes of the Internal Revenue Code of 1954 "(1) FAIR MARKET VALUE RULE.-Except as provided in paragraph (2), if a taxpayer has a section 614(b) aggregation, then the adjusted basis (as of the first day of the first taxable year beginning after December 31, 1963) of each property included in such aggregation shall be determined by multiplying the adjusted basis of the aggregation by a fraction "(A) the numerator of which is the fair market value of such property, and "(B) the denominator of which is the fair market value of such aggregation. For purposes of this paragraph, the adjusted basis and the fair market value of the aggregation, and the fair market value of each property included therein, shall be determined as of the day preceding the first day of the first taxable year which begins after December 31, 1963. "(2) ALLOCATION OF ADJUSTMENTS, ETC.-If the taxpayer makes an election under this paragraph with respect to any section 614(b) aggregation, then the adjusted basis (as of the first day of the first taxable year beginning after December 31, 1963) of each property included in such aggregation shall be the adjusted basis of such property at the time it was first included in the aggregation by the taxpayer, adjusted for that portion of those adjustments to the basis of the aggregation which are reasonably attributable to such property. If, under the preceding sentence, the total of the adjusted bases of the interests included in the aggregation exceeds the adjusted basis of the aggregation (as of the day preceding the first day of the first taxable year which begins after December 31, 1963), the adjusted bases of the properties which include such interests shall be adjusted, under regulations prescribed by the Secretary of the Treasury or his delegate, so that the total of the adjusted bases of such interests equals the adjusted basis of the aggregation. An election under this paragraph shall be made at such time and in such manner as the Secretary of the Treasury or his delegate shall by regulations prescribe. "(3) DEFINITIONS. For purposes of this subsection "(A) SECTION 614(B) AGGREGATION.-The term 'section 614(b) aggregation' means any aggregation to which section 614(b) (1) (A) of the Internal Revenue Code of 1954 (as in effect before the amendments made by subsection SEC. 614-Continued ANCILLARY PROVISIONS (P.L. 88-272, § 226 (c))-Continued (a) of this section) applied for the day preceding the first day of the first taxable year beginning after December 31, 1963. "(B) PROPERTY.-The term 'property' has the same meaning as is applicable, under section 614 of the Internal Revenue Code of 1954, to the taxpayer for the first taxable year beginning after December 31, 1963." SEC. 615. EXPLORATION EXPENDITURES (68A Stat. 211): (c)__ (in full) July 6, 1960, H.R. 4251, P.L. 86-594, § 1, 74 Stat. 333: "(c) LIMITATION. "(1) IN GENERAL. This section shall not apply to any amount paid or incurred to the extent that it would, when added to the amounts which have been deducted under subsection (a) and the amounts which have been treated as deferred expenses under subsection (b), or the corresponding provisions of prior law, exceed $400,000. "(2) AMOUNTS TAKEN INTO ACCOUNT.-For purposes of paragraph (1), there shall be taken into account amounts deducted and amounts treated as deferred expenses by "(A) the taxpayer, and "(B) any individual or coproration who has transferred to the taxpayer any mineral property. "(3) APPLICATION OF PARAGRAPH (2) (B).-Paragraph (2) (B) shall apply with respect to all amounts deducted and all amounts treated as deferred expenses which were paid or incurred before the latest such transfer from the individual or coproration to the taxpayer. Paragraph (2) (B) shall apply only if "(A) the taxpayer acquired any mineral property from the individual or corporation under circumstances which make paragraph (7), (8), (11), (15), (17), (20), or (22) of section 113 (a) of the Internal Revenue Code of 1939 apply to such transfer; "(B) the taxpayer would be entitled under section 381(c) (10) to deduct expenses deferred under this section had the distributor or transferor corporation elected to defer such expenses; or "(C) the taxpayer acquired any mineral property from the individual or corporation under circumstances which make section 334(b), 362 (a) and (b), 372(a), 373 (b) (1), 1051, or 1082 apply to such transfer." Applicability: Only taxable years beginning after the date of enactment (July 6, 1960). (Id., § 2, 74 Stat. 333.) Subsection (c) of section 615 originally read as follows (68A Stat. 211): "(c) LIMITATION.-This section shall not apply to any amount paid or incurred in any taxable year if in any 4 preceding years a deduction or election under this section, or the corresponding provision of prior laws, has been allowed to, or exercised by— "(1) the taxpayer, or "(2) the individual or corporation who has transferred to the taxpayer any mineral property. Paragraph (2) shall apply only if (A) the taxpayer was required to take into account under section 23 (ff) (3) of the Internal Revenue Code of 1939 the deduction allowed to or election exercised by such individual or corporation; (B) the taxpayer would be entitled under section 381(c) (10) to deduct expenses deferred under this section had the distributor or transferor corporation elected to defer such expenses; or (C) the taxpayer acquired any mineral property under circumstances which make section 334 (b), 362 (a) and (b), 372 (a), 373 ̊(b) (1), 723, 732, 1051, or 1082 apply to such transfer." CH. 1, SUBCH. I, PART II-EXCLUSIONS FROM GROSS INCOME (68A Stat. 212–213). NOTE: The table of sections for Part II of Subchapter I of Chapter 1 reads as follows (68A Stat. 212): "Sec. 621. Payments to encourage exploration, development, and mining for defense purposes." No amendments have been made to this table or to section 621. CH. 1, SUBCH. I, PART III-SALES AND EXCHANGES (68A Stat. 213-214): Table (1st item) Feb. 26, 1964, H.R. 8363, P.L. 88-272, § 227(b) (2), 78 Stat. 98: "Sec. 631. Gain or loss in the case of timber or coal." and inserting in lieu thereof the following: "Sec. 631. Gain or loss in the case of timber, coal, or domestic iron ore." Applicability: See amendments to section 631 below. SEC. 631. GAIN OR LOSS IN THE CASE OF TIMBER OR COAL Heading (in full) (c)_. (68A Stat. 213–214): Feb. 26, 1964, H.R. 8363, P.L. 88-272, § 227(b)(1), 78 Stat. 98: "SEC. 631. GAIN OR LOSS IN THE CASE OF TIMBER, COAL, OR DO- Applicability: Amounts received or accrued in taxable years beginning after December 31, 1963, attributable to iron ore mined in such taxable years. (Id., § 227 (c), 78 Stat. 98.) Feb. 26, 1964, H.R. 8363, P.L. 88-272, § 227(a)(1), 78 Stat. 97: (A) by striking out the heading and inserting in lieu thereof the following: "(c) DISPOSAL OF COAL OR DOMESTIC IRON ORE WITH A RETAINED ECONOMIC INTEREST.-"; 189 The table of sections for Part III of Subchapter I of Chapter 1 originally read as follows (68A Stat. 213): "Sec. 631. Gain or loss in the case of timber or coal. 190 Subsection (c) of section 631 originally read as follows (78A Stat. 214): "(c) DISPOSAL OF COAL WITH A RETAINED ECONOMIC INTEREST.-In the case of the disposal of coal (including lignite), held for more than 6 months before such disposal, by the owner thereof under any form of contract by virtue of which such owner retains an economic interest in such coal, the difference between the amount realized from the disposal of such coal and the adjusted depletion basis thereof plus the deductions disallowed for the taxable year under section 272 shall be considered as though it were a gain or loss, as the case may be, on the sale of such coal. Such owner shall not be entitled to the allowance for percentage depletion provided in section 613 with respect to such coal. This subsection shall not apply to income realized by any owner as a co-adventurer, partner, or principal in the mining of such coal, and the word 'owner' means any person who owns an economic interest in coal in place, including a sublessor. The date of disposal of such coal shall be deemed to be the date such coal is mined. In determining the gross income, the adjusted gross income, or the taxable income of the lessee, the deductions allowable with respect to rents and royalties shall be determined without regard to the provisions of this subsection. This subsection shall have no application, for purposes of applying subchapter G, relating to corporations used to avoid income tax on shareholders (including the determinations of the amount of the deductions under section 535(b) (6) or section 545(b) (5)." SEC. 631-Continued (c) (amended 1964) -Continued (B) by inserting after "coal (including lignite)," the following: "or iron ore mined in the United States,"; (C) by inserting after "coal" each other place it appeared the following: "or iron ore"; and (D) by adding at the end thereof the following new sentence: "This subsection shall not apply to any disposal of iron ore "(1) to a person whose relationship to the person disposing of such iron ore would result in the disallowance of losses under section 267 or 707(b), or "(2) to a person owned or controlled directly or indirectly by the same interests which own or control the person disposing of such iron ore." Applicability: Amounts received or accrued in taxable years beginning after December 31, 1963, attributable to iron ore mined in such taxable years. (Id., § 227 (c), 78 Stat. 98.) ANCILLARY PROVISIONS: Feb. 26, 1964, H.R. 8363, P.L. 88-272, § 227(b) (7), 78 Stat. 98: Amended section 211(a) (3) (B) of the Social Security Act to read as follows: "(B) from the cutting of timber, or the disposal of timber, coal, or iron ore, if section 631 of the Internal Revenue Code of 1954 applies to such gain or loss,". CH. 1, SUBCHAPTER J-ESTATES, TRUSTS, BENEFICIARIES, AND DECEDENTS (68A Stat. 215, ff.): NOTE: The table of parts for Subchapter J of Chapter 1 reads as follows (68A Stat. 215): "Part I. Estates, trusts, and beneficiaries. This table has not been amended. CH. 1, SUBCH. J, PART I-ESTATES, TRUSTS, AND BENEFICIARIES (68A Stat. 215-235): NOTE: The table of subparts for Part I of Subchapter J of Chapter 1 reads as follows (68A Stat. 215): "Subpart A. General rules for taxation of estates and trusts. "Subpart B. Trusts which distribute current income only. "Subpart C. Estates and trusts which may accumulate income or which distribute corpus. "Subpart D. Treatment of excess distributions by trusts. "Subpart E. Grantors and others treated as substantial owners. "Subpart F. Miscellaneous." This table has not been amended. CH. 1, SUBCH. J, PART I, SUBPART A-GENERAL RULES FOR TAXATION OF ESTATES AND TRUSTS (68A Stat. 215-218): NOTE: The table of sections for Subpart A of Part I of Subchapter J of Chapter 1 reads as follows (68A Stat. 215): "Sec. 641. Imposition of tax. "Sec. 642. Special rules for credits and deductions. "Sec. 643. Definitions applicable to subparts A, B, C, and D." This table has not been amended. |