Client purchased a Mining Claim for $15,000 and has been working full time since August in AZ. The claim has been worked before, but now with the price of gold people are going back in. He has about another $4,000 in supplies which is used to fix up and scrub scrap and expand the existing areas. He is going to lose money, which is not unusual in first years of operation, but I do not know what can be done with the $15,000 with the claim he pays another $160 fee for the mineral rights for a year. He says the claim is for as long as he wants and he can sell at the end. Is it an intangible asset amortized for 15, he does not think there is land included with the claim?? Do I just use % depletion and do not touch the claim?? I do not think the claim will be worth much when he sells? It is a one person operation and he works more than full time in it.
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