
    Royal W. Irwin, Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 79044.
    Promulgated January 11, 1938.
    
      Peter L. Wentz, Esq., for the petitioner.
    
      Elmer L. Corbin, Esq., for the respondent.
   OPINION.

MuRdock:

The figures involved are not disputed. The Commissioner suggests that the loss may not have been from a business regularly carried on by the petitioner. Sec. 117 (a) (1), Revenue Act of 1932. The evidence shows, however, that the petitioner was regularly engaged in the mining business in connection with this particular property during all of the period from 1922 until the termination of the agreement in 1931. He gave the work a part of his personal attention, made frequent visits to the property, received regular reports from his mining engineer, wrote frequently to the latter instructing him in the conduct of the work, and was personally responsible for all decisions. He was also engaged in other business and he failed to develop this property commercially, but those facts did not prevent him from being regularly engaged in this mining business. John D. Roney, 26 B. T. A. 1213; affd., 67 Fed. (2d) 165; certiorari denied, 290 U. S. 705; R. J. Richards, 30 B. T. A. 1131; affd., 81 Fed. (2d) 369; T. I. Crane, 17 B. T. A. 720; Oscar K. Eysenbach, 10 B. T. A. 716.

Since the expenditures were all made in an effort to develop the property, they were not deductible in years prior to 1931. Art. 235, Regulations 77. Cf. Connellsville Central Cohe Co., 27 B. T. A. 771. The net receipts were from sales made from ore produced for experimental purposes. No deduction for depreciation or depletion was ever claimed or allowed. None was allowable to the petitioner. The capital net loss section has no application, since the expenditures did not result in the acquisition by the petitioner of any capital asset and since his loss did not result from a sale or exchange. Sec. 101 (c) (2) and (8); R. W. Hale, 32 B. T. A. 356; affd., 85 Fed. (2d) 819; Mont S. Echols, 24 B. T. A. 1127; affd., 61 Fed. (2d) 191.

Decision will be entered for the fetitioner.  