William O. Douglas,
Choate v. Commissioner of Internal Revenue…
“ Section 23 (m) provides that in the case of 'mines, oil and gas wells, other natural deposits, and timber, a reasonable allowance for depletion and for depreciation of improvements, according to the peculiar conditions in each case' may be taken as a deduction. And see Treasury Regulations 101, Art. 23 (m) -10. Depletion is applicable to wasting assets-to the exhaustion of natural resources, not of property used in a business. See 4 Mertens, Law of Federal Income Taxation (1942) § 24.02. That distinction between depletion and depreciation runs through the basis provisions of the Act. ”
