“Under §§ 56 and 57(a)(8) of the Internal Revenue Code of 1954, 26 U.S.C. §§ 56, 57(a)(8) (1976 ed.), a taxpayer must pay a ‘minimum tax’ on the excess of the allowable depletion deduction for an interest in a mineral deposit over the taxpayer’s adjusted basis for that interest. The question presented here is whether the term ‘adjusted basis,’ as used in § 57(a)(8), includes certain depreciable drilling and development costs identified in § 1.612-4(c)(1) of the Treasury Department regulations.”
“We hold that the term does not cover such costs.”
