Here, the taxpayer is a mining company that transferred its interest in a mine to a company for consideration but retained a bonus royalty and production royalty. As is typical with a bonus royalty, it was paid in a single lump sum after a specified amount of cumulative reserves had been added to existing reserves. As for the production royalty, it was paid based on a sliding scale that maxed-out at a fixed percentage for the commodity price beyond a set level again after a certain amount of reserves had been produced. The IRS determined that the taxpayer could claim a depletion deduction attributable to the retained production royalty because the taxpayer retained an economic interest in that production royalty that satisfied Treas. Reg. §1.611-1(b) and Treas. Reg. §1.614-1(a)(2). The IRS determined, however, that the retained bonus royalty was not a retained economic interest in mineral in place. Tech. Adv. Memo. 201448020 (Jun. 3, 2014).