[Code of Federal Regulations]
[Title 26, Volume 7]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.615-8]

[Page 517-518]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.615-8  Termination of section 615.

    (a) In general. The provisions of section 615 shall not apply to 
exploration expenditures paid or incurred after December 31, 1969. 
Expenditures paid or incurred before January 1, 1970, which were 
deferred under section 615(b) will be deductible under such section 
after such date as the units of ore or mineral discovered or explored by 
reason of such expenditures are sold. An election under section 615(e) 
with respect to expenditures paid or incurred prior to January 1, 1970, 
shall remain in effect with respect to such expenditures unless it is 
revoked under section 615(e) and Sec. 1.615-6. See Sec. 1.615-9 for 
treatment of a section 615(e) election with respect to expenditures paid 
or incurred after December 31, 1969.
    (b) Taxable years beginning before January 1, 1970, and ending after 
December 31, 1969--(1) In general. The termination of section 615 
applies to expenditures paid or incurred after December 31, 1969. The 
income tax treatment of exploration expenditures paid or incurred before 
January 1, 1970, will be determined in accordance with the provisions of 
sections 615 and 617 prior to their amendment by the Tax Reform Act of 
1969 (83 Stat. 487). The fact that on his income tax return for a 
taxable

[[Page 518]]

year beginning before January 1, 1970, and ending after December 31, 
1969, a taxpayer deducts under section 615 expenditures paid or incurred 
before January 1, 1970, shall not affect his right to deduct under 
section 617(a) expenditures paid or incurred during such taxable year 
after December 31, 1969.
    (2) Allocation in case of inadequate records. If a taxpayer pays or 
incurs exploration expenditures during a taxable year beginning before 
January 1, 1970, and ending after December 31, 1969, but his records are 
inadequate to permit a determination of the amount paid or incurred 
during the portion of the year ending after December 31, 1969, and the 
amount paid or incurred on or before such date, the exploration 
expenditures as to which the records are inadequate paid or incurred 
with respect to the mine or property during the taxable year shall be 
allocated to each part of the year (that is, the part before January 1, 
1970, and the part occurring after December 31, 1969) in the same ratio 
which the number of days in each such part year bears to the number of 
days in the entire taxable year.

[T.D. 7192, 37 FR 12941, June 30, 1972]