Davis v. Commissioner
United States Tax Court
1. P and others were partners in PS, a coal mining joint venture. PS acquired by lease the rights to mine coal from the properties of various landowner-lessors. PS then subleased these rights to a corporation, WC, which carried out the actual mining and paid royalties to PS. PS paid yearly advanced minimum royalties to the landowners before coal was mined and earned royalties per ton as coal was mined.
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1. P and others were partners in PS, a coal mining joint venture. PS acquired by lease the rights to mine coal from the properties of various landowner-lessors. PS then subleased these rights to a corporation, WC, which carried out the actual mining and paid royalties to PS. PS paid yearly advanced minimum royalties to the landowners before coal was mined and earned royalties per ton as coal was mined. Earned royalties due the landowners were reduced by credits for earlier unearned advanced royalties paid. PS and each of its partners reported all royalties received from WC, the mining…
1DissentGoffe, J.
Section 631(c) and related provisions of the Internal Revenue Code, as well as an established body of case law, mandate a holding in petitioners’ favor on the first issue in this case. I dissent for the following separate and distinct reasons:(1) The treatment of royalties paid by Cumberland to the coal owners, as approved by the majority and reflected in the example in section 1.631 — 3(b)(3)(ii)(6), Income Tax Regs., is incorrect and inconsistent with section 631 of the Internal Revenue Code and the body of section 1.631-3(b)(3)(ii)(a), Income Tax Regs., and,(2) The body of section…
2Cases cited20 opinions
- Burnet v. HarmelSupreme Court of the United States · 1932
- United States v. CartwrightSupreme Court of the United States · 1973
- Manhattan General Equipment Co. v. Commissioner of Internal RevenueSupreme Court of the United States · 1936
- Palmer v. BenderSupreme Court of the United States · 1932
- Koshland v. HelveringSupreme Court of the United States · 1936
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