Wegener v. Commissioner
United States Board of Tax Appeals
Petitioner and two associates owned undivided one-third interests in certain oil leases which were developed and operated as a joint venture, and financed from borrowed money obtained on the joint and several credit of the joint venturers. Petitioner, a driller, entered into a contract to drill the oil wells on the property at an agreed price per foot. In the taxable year he was paid $130,594.50 for footage drilled at the agreed price.
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Petitioner and two associates owned undivided one-third interests in certain oil leases which were developed and operated as a joint venture, and financed from borrowed money obtained on the joint and several credit of the joint venturers. Petitioner, a driller, entered into a contract to drill the oil wells on the property at an agreed price per foot. In the taxable year he was paid $130,594.50 for footage drilled at the agreed price. Held, that the entire profit computed as the difference between the amount received and the cost of drilling is taxable income to petitioner.
1Opinion of the Court
*861OPINION.
Kern :
The only issue before ns is whether the respondent erred in including in petitioner’s income for 1935 the amount of $23,592.08 as additional income from drilling operations on the Husk County, Texas, oil leases.
In computing petitioner’s income tax liability the respondent considered Gant, Garvin & Wegener to be a partnership for income tax purposes and petitioner a partner. He considered that petitioner, as an individual contractor, drilled oil wells on the leased property at an agreed price, and determined that in the taxable year petitioner realized from such drilling…
2Cases cited1 opinion
- Burk-Waggoner Oil Assn. v. HopkinsSupreme Court of the United States · 1925
3Cited by13 opinions
- Krichbaum v. United StatesDistrict Court, E.D. Tennessee · 1956
- Stout v. CommissionerUnited States Tax Court · 1959
- Pratt v. CommissionerUnited States Tax Court · 1975
- Wegener v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1941
- Egolf v. CommissionerUnited States Tax Court · 1986
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