sale of "unpatented mining claims"

[mzcpa2001]

Client sold "unpatented mining claims" to an unrelated third party.  Is the gain capital or ordinary?  Does IRC section 617 apply?

Thank you,

Martin Zeldin, CPA

Tucson, AZ

[PhoebeRoberts]

So the internet says that an "unpatented mining claim" is essentially a mineral leasehold on Federal land. 

Personally, I'd treat it as the sale of any other mineral leasehold. I know the rules for sales of oil & gas leaseholds, but if you're looking at Sec 617 (which appears to be the non-O&G equivalent to G&G), presumably it's some other mineral that your guy was hoping to extract.

[qbteachmt]

How did your client acquire this? Was there a time limit on that lease that is already in play?