Reilly Oil Co. v. Commissioner
United States Tax Court
Petitioner is the successor to a predecessor corporation which owned certain oil properties in Texas. Respondent in his determination of the deficiencies determined that petitioner acquired these properties from its predecessor in a nontaxable reorganization and must take its predecessor's basis of cost and has computed petitioner's depletion on the percentage basis because that yields petitioner a larger deduction for depletion than depletion based on cost.
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Petitioner is the successor to a predecessor corporation which owned certain oil properties in Texas. Respondent in his determination of the deficiencies determined that petitioner acquired these properties from its predecessor in a nontaxable reorganization and must take its predecessor's basis of cost and has computed petitioner's depletion on the percentage basis because that yields petitioner a larger deduction for depletion than depletion based on cost. Petitioner contends that it acquired its oil properties in transactions which were taxable and that it is entitled to use its own basis…
1Opinion of the Court
OPINION.
Black, Judge:
The only question we have to decide in the instant case is the amount of depletion deduction which petitioner is entitled to receive in each of the taxable years 1943 and 1944.
[Respondent in his determination of the deficiencies computed depletion on the percentage basis. He did this on his determination that the transactions by which petitioner acquired its oil properties amounted to a nontaxable reorganization and that by reason of that fact petitioner is required to take the basis of cost of its predecessor, which was only a nominal amount, and, therefore, petitioner…
2Cases cited1 opinion
- Lewis v. CommissionerUnited States Tax Court · 1948
3Cited by18 opinions
- Becher v. CommissionerUnited States Tax Court · 1954
- Reilly Oil Co. v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1951
- Murrin v. CommissionerUnited States Tax Court · 1955
- Atlas Oil & Refining Corp. v. CommissionerUnited States Tax Court · 1961
- San Antonio Transit Co. v. CommissionerUnited States Tax Court · 1958
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