96
PUBLIC LAW 88-272-FEB. 26, 1964 "(4)
[78 STAT.
MANNER, TIME, AND SCOPE OF ELECTION.—
" (A) MANNER AND TIME.—Any election provided
in
paragraph (2) shall be made for each operating mineral mterest, in the manner prescribed by the Secretary or his delegate by regulations, not later than the time prescribed by law for filing the return (including extensions thereof) for whichever of the following taxable years is the later: The first taxable year beginning after December 31, 1963, or the first taxable year in which any expenditure for development or operation in respect of such operating mineral interest is made by the taxpayer after the acquisition of such interest. " (B) SCOPE.—Any election under paragraph (2) shall be for all purposes of this subtitle and shall be binding on the taxpayer for all subsequent taxable years. "(5) TREATMENT OF CERTAIN PROPERTIES.—If, on the day preceding the first day of the first taxable year beginning after December 31, 1963, the taxpayer has any openiting mineral interests which he treats under subsection (d) of this section (as in effect before the amendmeTits made by the Revenue Act of 1964), such treatment shall be continued and shall be deemed to have been adopted pursuant to paragraphs (1) and (2) of this subsection (as amended by such Act). " (b)
26 USC eu^"
TECHNICAL AMENDMENTS.—
^^^ '^'^® heading of section 614(c) is amended to read as follows: " (c) SPECIAL MINES,—"
^epe^i-
26 USC f*6i3°^*
RI'LES
AS TO OPERATINCJ MINERAL INTERESTS I N
(2) Paragraph (5) of section 614(c) is hereby repealed. (3) Section 614(d) is amended to read as follows: " (d) ()PERATIN(} MINERAL INTERESTS DEFINED.—For purposes of this section, the term 'operating mineral interest' inclunes 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 ctmiputing the 50 jjercent limitation provided for hi section 613, or would be so recpiired if the mine, well, or other natural deposit were in the production stage.'" (4) Sec'tion 614(e)(2) is amended by striking out "within the meaning of subsection (b)(3) ". (c)
ALLOCATION OF BASIS I N CERTAIN CASES.—For purposes
of
the Internal Revenue Code, of 1954— (1) F A I R 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 su(?h 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 firet taxable year which begins after Detrember 31, 1963. (2) ALLOCATION OF ADJUSTMENTS, ETC,—If the taxpayer makes an election under this paragraph with respe(;t to any section 614 (b) aggregation, then the adjusted basis (as of the first day of the
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