State Consol. Oil Co. v. Commissioner
United States Board of Tax Appeals
Disbursements made by a taxpayer under contract for drilling oil wells on another's property, for which it was to be compensated out of the fruits of the contract before dividing with the owner and which were treated by taxpayer as accounts receivable, held not deductible by taxpayer in the year of disbursement as ordinary and necessary expenses.
1Opinion of the Court
*88OPINION.
Sternhagen:
The petitioner abandons its attempt to prove a fair market price or value on March 1, 1913, of the McKittrick property greater than that of $75,000 determined by respondent, and we sustain that determination without discussion.
The respondent has conceded petitioner’s claimed deduction of $351.20 for 1920 and $4,989.52 for 1921 as reasonable allowances for exhaustion, wear and tear of equipment, and the deficiency should in this respect be adjusted accordingly.
As to the disbursements made during the taxable years in drilling under the Dabney lease, we see no sufficient…
2Cited by1 opinion
- State Consol. Oil Co. v. CommissionerUnited States Board of Tax Appeals · 1930