Rev. Rul. 59-385

Advice has been requested whether sand or gravel-sized fragments of a rock which might be classified as `quartzite' on the basis of the geological and petrological character of the individual fragments will be treated as quartzite for percentage depletion purposes in the light of South Jersey Sand Co. v. Commissioner , 30 T.C. 360, affirmed, 267 Fed.(2d) 591.

Revenue Ruling 57-584, C.B. 1957-2, 898, holds that the term `quartzite,' for purposes of section 114(b)(4)(A)(iii) of the Internal Revenue Code of 1939 (as amended by section 319 of the Revenue Act of 1951) and section 39.23(m)-5(a) of Regulations 118, is defined as a mineral deposit of metamorphosed or silica-cemented sandstone having a free silicon dioxide content in excess of 95 percent; being so firmly cemented that it has the characteristic of breaking across rather than around the original sand grains; having a low porosity; and being very resistant to high temperatures, sudden changes in temperature and most chemical reagents.

The South Jersey Sand Co. , case, stands for the proposition that notwithstanding the geological and petrological composition of taxpayer's material, the taxpayer must also meet the test of size if the deduction for depletion as quartzite is claimed. All ordinary definitions of quartzite and sand, as those terms are understood in their ordinary commercial sense, stress the visible, readily discernable, dissimilarity between quartzite, the hard compact rock, and sand, the hard small grains.

The Service's position is reflected by the decision of the South Jersey Sand Co. , case. Therefore, it is held that sand or gravel-size fragments of a rock which might be classified as `quartzite' on the basis of the geological and petrological character of the individual fragments will not be treated as quartzite for percentage depletion purposes.

Revenue Ruling 57-584, C.B. 1957-2, 898, is clarified to the extent that it may imply that depletion my be appropriate for quartzite pebbles as quartzite.