516
^ u^s" c § 23 m
stilS58*°stK' 26 U.S.C.J 113(a).
^'*-^"26u1-c-§ii4 Ante, pp. 497, 498.
PUBLIC LAW 183—OCT. 20, 1951
[65 STAT.
mineral, and paid or incurred prior to the beginning of the development stage of the mine or deposit, so much of such expenditures as does not exceed $75,000. This subsection shall apply only with respect to the amount of such expenditures which, but for this subsection, would not be allowable as a deduction for the taxable year. This subsection shall not apply to expenditures for the acquisition or improvement of property of a character which is subject to the allowance for depreciation provided in section 23(1), but allowances for depreciation shall be considered, for the purposes of this subsection, as expenditures paid or incurred. I n no case shall this subsection apply with respect to amounts paid or incurred for the purpose of ascertaining the existence, location, extent, or quality of any deposit of oil or gas. " (2) ELECTION OF TAXPAYER.—If the taxpayer elects, in accordance with regulations prescribed by the Secretary, to treat as deferred expenses any portion of the amount deductible for the taxable year under paragraph (1), such portion shall not be deductible under paragraph (1) but shall be deductible on a ratable basis as the units oi produced ores or minerals discovered or explored by reason of such expenditures are sold. An election made under tnis paragraph for any taxable year shall be binding for such year. "(3) LIMITATION.—This subsection shall not apply to any amounts paid or incurred in any taxable year if in any four preceding years the taxpayer, or any individual or corporation who has transferred to the taxpayer any mineral property under circumstances which make the provisions of paragraph (7), (8), ( l l) ' (13), (15), (17), (20) or (22^ of section 113(a) appllCable to such transfer, has either (A) been allowed a deduction under paragraph (1) of this subsection or (B) made the election provided under paragraph (2) of this subsection. "(4) ADJUSTED BASIS OF MINE OR DEPOSIT.—The amount of expenditures which are treated under paragraph (2) as deferred expenses shall be taken into account in computing the adjusted basis of the mine or deposit, b u t such amounts, and the adjustments to basis provided in section 113(b)(1)(M) shall be disregarded in determining the adjusted basis of the property for the purpose of computing a deduction for depletion under section 114." (b) ADJUSTED B A S I S FOR D E T T E R M I N I N G G A I N OR L o s S IJPON S A L E OR
lu^sc§u3(b) EXCHANGE.—Section 113(b)(1) (relating to adjusted basis of propAnte, pp.' 487, 4 7 eity) is hereby amended by adding at the end thereof the following: 91 ^^' " (M) for amounts allowed as deductions as deferred exAnte, p. 515. peuscs under section 23 (ff)(2) (relating to certain exploration expenditures) and resulting in a reduction of the taxpayer's taxes under this chapter, but not less than the amounts allowable under such section for the taxable year and prior years." (c) EFFECTIVE DATE.—The amendments made by this section shall be applicable to taxable years ending after December 31, 1950. SEC. 343. DEFINITION OF EMPLOYEE. 26u*s*a%797 (a). (*) AMENDMENT or SECTION 3797 (a).—Section 3797(a) is amended Ante, pp.'49i, 511. by adding at the end thereof the following new paragraph: "(20) EMPLOYEE.—For the purpose of applying the provisions of chapter 1 with respect to contributions to or under a stock bonus, pension, profit-sharing, or annuity plan, and with respect to distributions under such a plan or by a trust forming part of such a plan, the term 'employee' shall include a full-time life insurance salesman who is considered an employee for the purpose
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