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TITLE 26-INTERNAL REVENUE CODE parcel of land with an operating mineral in- terest in another tract or parcel of land. (2) Election to treat operating mineral Interests as separate properties. If the taxpayer has more than one operat- ing mineral interest in a single tract or parcel of land, he may elect to treat one or more of such operating mineral interests as separate properties. The taxpayer may not have more than one combination of operating mineral interests in a single tract or parcel of land. If the taxpayer makes the election provided in this paragraph with respect to any interest in a tract or parcel of land, each operating min- eral interest which Is discovered or acquired by the taxpayer in such tract or parcel of land after the taxable year for which the election is made shall be treated- (A) if there is no combination of interests in such tract or parcel, as a separate proper- ty unless the taxpayer elects to combine It with another interest, or (B) if there is a combination of interests in such tract or parcel, as part of such com- bination unless the taxpayer elects to treat it as a separate property. (3) Certain unitization or pooling arrangements (A) In general Under regulations prescribed by the Sec- retary, if one or more of the taxpayer's op- erating mineral interests participate, under a voluntary or compulsory unitization or pooling agreement, in a single cooperative or unit plan of operation, then for the period of such participation- (I) they shall be treated for all purposes of this subtitle as one property, and (ii) the application of paragraphs (1), (2), and (4) in respect of such interests shall be suspended. (B) Limitation Subparagraph (A) shall apply to a volun- tary agreement only if all the operating mineral interests covered by such agree- ment- (i) are in the same deposit, or are in 2 or more deposits the joint development or production of which is logical from the standpoint of geology, convenience, econ- omy, or conservation, and (i) are in tracts or parcels of land which are contiguous or in close proximity. (C) Special rule in the case of arrangements en- tered into a taxable years beginning before January 1, 1964 If- (i) two or more of the taxpayer's operat- ing mineral interests participate under a voluntary or compulsory unitization or pooling agreement entered into in any taxable year beginning before January 1, 1964, in a single cooperative or unit plan of operation, (i) the taxpayer, for the last taxable year beginning before January 1, 1964, treated such interests as two or more sep- arate properties, and (iii) it is determined that such treat- ment was proper under the law applicable to such taxable year, such taxpayer may continue to treat such interests in a consistent manner for the period of such participation. (4) Manner, time, and scope of election (A) Manner and time Any election provided in paragraph (2) shall be made for each operating mineral interest, in the manner prescribed by the Secretary by regulations, not later than the time prescribed by law for filing the return (including extensions thereof) for whichev- er of the following taxable years is the later: The first taxable year beginning after December 31, 1963, or the first taxable year in which any expenditure for development or operation in respect of such operating mineral interest is made by the taxpayer after the acquisition of such interest. (B) Scope Any election under paragraph (2) shall be for all purposes of this subtitle and shall be binding on the taxpayer for all subsequent taxable years. (5) Treatment of certain properties If, on the day preceding the first day of the first taxable year beginning after December 31, 1963, the taxpayer has any operating min- eral interests which he treats under subsec- tion (d) of this section (as in effect before the amendments made by the Revenue Act of 1964), such treatment shall be continued and shall be deemed to have been adopted pursu- ant to paragraphs (1) and (2) of this subsec- tion (as amended by such Act). (c) Special rules as to operating mineral interests in mines (1) Election to aggregate separate interests Except in the case of oil and gas wells, if a taxpayer owns two or more separate operat- ing mineral interests which constitute part or all of an operating unit, he may elect (for all purposes of this subtitle)- (A) to form an aggregation of, and to treat as one property, all such interests owned by him which comprise any one mine or any two or more mines; and (B) to treat as a separate property each such interest which is not included within an aggregation referred to in subparagraph (A). For purposes of this paragraph, separate op- erating mineral interests which constitute part or all of an operating unit may be aggre- gated whether or not they are included in a single tract or parcel of land and whether or not they are included in contiguous tracts or parcels. For purposes of this paragraph, a taxpayer may elect to form more than one ag- gregation of operating mineral interests within any one operating unit; but no aggre- gation may include any operating mineral in- terest which is a part of a mine without in- cluding all of the operating mineral interests which are a part of such mine in the first tax- able year for which the election to aggregate is effective, and any operating mineral inter- Page 449 § 614