Engle v. Commissioner
United States Tax Court
Petitioners made assignments in 1975 of two oil and gas leases held by them, retaining, however, overriding royalties of 4 percent from one lease and 5 percent from the other.
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Petitioners made assignments in 1975 of two oil and gas leases held by them, retaining, however, overriding royalties of 4 percent from one lease and 5 percent from the other. As part of the consideration for the assignments, they received advance royalties totaling $ 7,600. There was no production of oil or gas from either of the leases during 1975. Held, under sec. 613A(c), I.R.C. 1954, petitioners are not entitled to deduct percentage depletion with respect to the advance royalties in 1975.
1Opinion of the Court
OPINION
Featherston, Judge:
Respondent determined a deficiency in the amount of $4,957.65 in petitioners’ Federal income tax for 1975. Petitioners failed to take exception to certain items of adjustment; therefore, the only issue for decision is whether a percentage depletion deduction is allowable under section 613A1 with respect to $7,600 that petitioners received in 1975, as advance royalties, under the terms of their assignment of two oil and gas leases.
All of the facts have been stipulated.
At the time the petition was filed, petitioners, who are husband and wife, were legal residents of…
2Cases cited6 opinions
- Palmer v. BenderSupreme Court of the United States · 1932
- Kirby Petroleum Co. v. CommissionerSupreme Court of the United States · 1946
- Herring v. CommissionerSupreme Court of the United States · 1934
- Sneed v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1941
- Sneed v. CommissionerUnited States Board of Tax Appeals · 1939
1 more not listed; retrieve them via the Exa API.
3Cited by11 opinions
- Commissioner v. EngleSupreme Court of the United States · 1984
- Glass v. CommissionerUnited States Tax Court · 1981
- Mearkle v. CommissionerUnited States Tax Court · 1986
- Farmar v. United StatesUnited States Court of Claims · 1982
- Potts v. CommissionerUnited States Tax Court · 1988
6 more not listed; retrieve them via the Exa API.