Chiquita Mining Co. v. Commissioner

Petition for review by this Court was filed by the taxpayer July 6, 1943 and involves Federal income and excess profits tax liability of the Chiquita Mining Company, Ltd., a corporation, for 1936 to 1938.

The Tax Court entered its decision against petitioner (corporation) on April 8, 1943 ordering and deciding that there are deficiencies in income tax for 1936 and 1938 in respective amounts of $2131.39 and $3279.96 and deficiency in excess profits tax for 1938 in the amount of $1817.79.

Two issues were raised in the pleadings in the Tax Court. The first dealt with proper allowance for depletion. The second dealt with the proper amount to be allowed for depreciation.

The depreciation issue was decided in favor of the taxpayer (petitioner) and is not before u's for review.

The property involved in this case consists of certain mining claims acquired by the taxpayer in 1932, in consideration for which it had issued shares of its capital stock to the owners of the claims. The Commissioner of Internal Revenue determined that the taxpayer’s mining property, upon which cost depletion was computed, had been acquired in a tax-free exchange and that the basis of the property in the…