As stated, we conclude in this case that the net operating loss carryback deductions are assignable in specific part directly to gross income earned in Canada, albeit income of a prior taxable year. Accordingly, we think that we have observed scrupulously the law as it is set down in Missouri Pac., and restated in Chicago, Milwaukee R. R. v. United States, 404 F.2d 960, 186 Ct.Cl. 250 (1968). III.

The decision has been applied in this court to bond issuance costs generally. Chicago, Milwaukee R. Co. v. United States, 404 F.2d 960, 967, 186 Ct.Cl. 250, 262 (1968). The Supreme Court in its opinion said that discount and expense were both "factors in arriving at the actual amount of interest paid for the use of capital procured by a bond issue" which "must be added to the aggregate coupon payments in order to arrive at the total interest paid."

We agree. This issue is governed by our decision in Chicago, Milwaukee, St. Paul and Pacific R. R. v. United States, 404 F.2d 960, 186 Ct.Cl. 250 (1968). In that case, we held that issuance expense would be treated as would discount, and this being so, there could be no carryover of debt discount or issuance expense if the maturity value of the new bonds is less than the amount that was received when the old securities were issued.

Mimeo 58, which explicitly excludes donated property from straight-line depreciation, is entwined with the terms letter and forms an integral part of the mutual understanding for the change-over from retirement accounting. See Chicago, Milwaukee, St. Paul Pacific R. R. v. United States, 186 Ct.Cl. 250, 266-272, 287-294, 404 F.2d 960, 969-972 (1968). One of those accepted conditions was the exclusion of donated property.

The government has not appealed the deductibility of certain other expenses and, therefore, the government's computation of net income from Mexico is not precisely correct. The District Court adopted the taxpayer's method of allocation. It held that running repairs performed in Mexico should be assigned directly to income earned in that country, and that property taxes paid to by the railroad to the various states of the United States should be assigned directly and solely to income earned in the United States. Its decision on both these issues was contrary to earlier decisions of the Court of Claims. See, Missouri Pacific Railroad Company v. United States, supra (running repairs and state property taxes), and Chicago, Milwaukee, St. Paul Pacific R. Co. v. United States, 404 F.2d 960 (Ct.Cl. 1968) (running repairs). Before discussing the specific issues raised on this appeal, we review the law with respect to the burden of proof.