REVENUE ACT OF 1926 
541 
the case of the property so acquired shall be the basis in 
the case of the stock or securities so sold or disposed of, 
except that if the repurchase price was in excess of the 
sale price such basis shall be increased in the amount of 
the difference, or if the repurchase price was less than 
the sale price such basis shall be decreased in the amount 
of the difference. 
(b) The basis for determining the gain or loss from Sale, etc, of 
the sale or other disposition of property acquired before before Mar. 1, 
March 1, 1913, shall be (A) the cost of such property (or, 1913, on cost or 
in the case of such property as is described in paragraph 
(1), (4), or (5), of subdivision (a), the basis as therein 
provided), or (B) the fair market value of such property 
as of March 1, 1913, whichever is greater. In determin- 
ing the fair market value of stock in a corporation as of 
March 1, 1913, due regard shall be given to the fair 
market value of the assets of the corporation as of that 
late. 
(¢) The basis upon which depletion, exhaustion, wear. , Depletion, ex 
and tear, and obsolescence are to be allowed in respect lowed. = 
of any property shall be the same as is provided in sub- 
division (a) or (b) for the purpose of determining the 
gain or loss upon the sale or other disposition of such 
property, except that— 
(1) In the case of mines discovered by the taxpayer ron eo 
after February 28, 1913, the basis for depletion shall be atter Feb. 2s. 
the fair market value of the property at the date of dis- *'* 
covery or within thirty days thereafter, if such mines 
were not acquired as the result of purchase of a proven 
tract or lease, and if the fair market value of the prop- 
erty is materially disproportionate to the cost. The de- aximum de 
pletion allowance based on discovery value provided in 
this paragraph shall not exceed 50 per centum of the net 
'ncome of the taxpayer (computed without allowance for 
depletion) from the property upon which the discovery 
was made, except that in no case shall the depletion al- 
lowance be less than it would be if computed without 
reference to discovery value. Discoveries shall include 
minerals in commercial quantities contained within a vein 
or deposit discovered in an existing mine or mining tract 
by the taxpayer after February 28, 1913, if the vein or 
deposit thus discovered was not merely the uninterrupted 
extension of a continuing commercial vein or deposit al- 
ready known to exist, and if the discovered minerals are 
of sufficient value and quantity that they could be sepa- 
rately mined and marketed at a profit. 
(2) In the case of oil and gas wells the allowance for 
depletion shall be 271% per centum of the gross income 
from the property during the taxable year. Such al- 
lowance shall not exceed 50 per centum of the net income 
of the taxpayer (computed without allowance for deple- 
ion) from the property, except that in no case shall the 
depletion allowance be less than it would be if computed 
without reference to this paragraph. 
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