*576OPINION.
Graupner:The taxpayer contends that the Commissioner committed error in refusing to allow as losses deductible from income (a) the sum of $70,857.20 which the taxpayer claimed as a loss resulting from mining operations near Las Vegas, Nev., and (5) the sum of $6,090.63 claimed as a loss sustained through mining operations near 'Aquila, Ariz. The Commissioner asserts that the losses claimed are not deductible items under the provisions of section 214 (a) of the Revenue Act of 1918, because (a) the losses sustained on the Las Vegas operations were not those of the taxpayer but of the Manganese Association, Inc., and (b) that if the taxpayer sustained any losses on the two ventures they were not sustained during the year 1919. The two assigned errors involve such distinctly different conditions that they must be separately discussed.
At the time of the purchase of the 500,000 shares of stock and the mining claims, described in paragraph 3 of the findings of fact, on April 17, 1918, the corporation had no assets, except an assignment of a lease for a period of three years on four mining claims. The corporation owned no machinery or equipment for operating the mines, and it had no funds. The taxpayer disregarded the corporate entity and placed his personal funds directly in the operation of the mining claims. Because the operating funds were used indiscriminately for operating the claims leased to the corporation and the claims owned by the taxpayer without any segregation and because the ore mined from various claims was intermingled without segregation, there is no way in which we can allocate any share of the m'oneys advanced for operating expense or received from sale of ore to the corporation or to any particular claim. The taxpayer intended the whole project to be his and, because he owned all the corporation’s stock, considered all rights of the Manganese Association merged into his individual venture. Whether the stock of the Manganese Association was worthless, when it became worthless, and, if worthless, when the taxpayer was entitled to claim his loss, are the questions which must be decided by the Board.
At no time after the acquisition of the stock by the taxpayer did the Manganese Association have any assets, except the leases to the four' mining claims. When the taxpayer abandoned the lease and the lease was declared forfeited on April 3, 1919, the corporation ceased *577to do business and to have any assets or claim to any assets. It had nothing with which to do business or to give the stock any worth, and there could be no market for its sale. Therefore, during 1919, the taxpayer was left with certificates representing 500,000 shares which had no value and no market. The stock became worthless during that year, and the taxpayer was entitled to deduct his loss thereon, unless there existed some claim upon which he could recover. Appeal of Milton H. Bickley, 1 B. T. A. 544.
The taxpayer filed a claim with the War Minerals Belief Commission during 1919, in which he sought to recover from the Government the loss he had sustained on the Las Vegas property. As the receipt from sales of manganese ore-greatly exceeded the cost of mining and producing, his claim for a loss on this venture could only be predicated upon moneys expended for purchases of properties and mining rights. As a matter of fact, his profits from ore sales recompensed the taxpayer for all expenditures for purchasing mining claims and a portion of the cost of the stock of the Manganese Association. Therefore, the taxpayer’s only claim for loss rested upon the unre-couped balance of $69,732.78 paid for the stock of the Manganese Association, and this stock was purchased for no other purpose than to use the mining rights of the corporation. His claim against the Government for such a loss was without merit, and there could be no chance of recovery thereon.
Section 5 of the Act of March 2, 1919, authorized the Secretary of the Interior “to adjust, liquidate, and pay such net losses as have been suffered by any person, firm, or corporation, by reason of producing or preparing to produce, either manganese, chrome, pyrites, or tungsten in compliance with the request or demand of the Department of the Interior,” etc. On its introduction in Congress, section 5 of the bill contained this further provision: “ or acquiring property for producing.” This clause was stricken from the bill while it was under consideration in the Senate on January 28, 1919. Senator Smoot objected to the provision in the following language:
I want to call the attention of the Senator from Nevada to the words “or acquiring property for producing.” It seems to me that is going too far. I think that where a man has purchased a piece of property for producing these metals, we should not authorize the Secretary of the Treasury to go into the question as to what he paid and whether he lost upon the purchase price of that property because of the fact that the war closed sooner than he anticipated. I believe that is going altogether too far. I will ask the Senator if it would not be very much better to strike out the words “ or acquiring property for producing ” ?
The chairman of the Senate Committee on Mines and Mining in charge of the bill replied: “I will consent to that, Mr. President.” Whereupon, the provision was stricken from the bill. 57 Cong. Bee., Pt. 3, p. 2213.
*578The taxpayer’s claim did not rest upon a loss .suffered “ by reason of producing or preparing to produce,” but upon a loss resulting from “acquiring property for producing.” He was without right under the law and therefore should not be prejudiced from deducting his loss when it was sustained in 1919 by the fact that he had filed a claim without merit. He should not'be compelled to await a certain adverse decision before claiming his deduction. We are, therefore, of the opinion that the taxpayer is entitled to a deduction for his loss in the amount of $88,500 on the stock in 1919.
What was the purchase price or market value of the nine mining claims named in paragraph 3 of the findings of fact and included in the $88,500 paid for the entire issue of the capital stock of the Association can not be determined from the evidence, but it, as well as the $3,000 paid for the three claims described in paragraph 4 of the findings, and the $1,200 paid for the seven claims described in paragraph 5 of the findings, became a loss immediately upon the execution of the taxpayer’s intention to abandon those claims, which he did in February of 1919.
A mining claim may be abandoned, as was said in Mallet v. Uncle Sam Gold and Silver Mining Co., 1 Nev. 188, and adopted in Harkrader v. Carroll, 76 Fed. 474, and McKay v. McDougall, 64 Pac. 669:
In determining whether one has abandoned his property or rights, the intention is the first and paramount object of inquiry; and .there can be no' strict abandonment of property without the intention to do so. * * * Abandonment may be completed the very instant the miner leaves his claim, for time is not an essential element of abandonment; the moment the intention to-abandon and the relinquishment of possession unite, the abandonment is complete.
The $30,000 paid by the taxpayer in May of 1918 for an option to purchase the four claims under lease to the Association became a loss in 1919 when he abandoned operation of the mines under lease and permitted the lease to be forfeited without intention to purchase the claims. This was the final act of abandonment of his rights to purchase and use the property and the meeting of intention and fact on abandonment. 18 R. C. L. 1167.
Thus the taxpayer’s actual loss in 1919 was as follows :
On stock and mining claims purchased as described in finding 3_$88, 500. 00
On mining claims purchased as described in finding 4_ 3, 000.00
On mining claims purchased as described in finding 5_ 1, 200. 00
On option to purchase described in finding 6_ 30, 000. 00
Total-122,700.00
Whether the taxpayer had any income from the operation of the mines during the month of January and the early part of February, 1919, we can not determine from the evidence at hand, there being no proof and no copy of the income-tax return before us.
*579Regarding the claim for losses on the Aquila properties, it would appear that those losses were sustained in 1921, at which time final settlement was made with the Government and the losses set at $1,828.30.
Arundell not participating.