Hedges v. Commissioner
United States Tax Court
Petitioner entered into several partnership or joint ventures for drilling and developing oil and gas wells. The partnerships contracted to pay the promoter-operators, as drilling contractors, a fixed price for drilling the wells, and petitioner paid his proportionate share. The promoter-operators subcontracted the work of actually cutting the holes in the ground and paid the subcontractors less than the fixed prices received from the joint ventures.
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Petitioner entered into several partnership or joint ventures for drilling and developing oil and gas wells. The partnerships contracted to pay the promoter-operators, as drilling contractors, a fixed price for drilling the wells, and petitioner paid his proportionate share. The promoter-operators subcontracted the work of actually cutting the holes in the ground and paid the subcontractors less than the fixed prices received from the joint ventures. Held, petitioner may deduct as intangible drilling and development expenses the amounts he paid the promoter-operators.
1Opinion of the Court
OPINION
Petitioners claim that the entire amounts they paid Garretson & Anderson as their share of the drilling and preparation costs on the Lindsay Palmer and Henry Smith leases, being one twenty-ninth ($650) of the total amounts paid by the partnerships or joint ventures to Garretson & Anderson ($18,850) for drilling a well on each of the abové leases, and the entire amounts they paid Jackson & Anderson as their share of the drilling and preparation costs on the A. M. Wilkinson lease, being one-sixteenth ($1,000) of the total amounts paid by the partnerships or joint ventures to Jackson &…
2Cases cited6 opinions
- Berkshire Oil Co. v. CommissionerUnited States Tax Court · 1947
- Commissioner of Internal Revenue v. AmbroseCourt of Appeals for the Fifth Circuit · 1942
- Manahan Oil Co. v. CommissionerUnited States Tax Court · 1947
- Retsal Drilling Co. v. CommissionerCourt of Appeals for the Fifth Circuit · 1942
- Platt v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1953
1 more not listed; retrieve them via the Exa API.
3Cited by17 opinions
- Haass v. CommissionerUnited States Tax Court · 1970
- Bernuth v. CommissionerUnited States Tax Court · 1971
- Coors Porcelain Co. v. CommissionerUnited States Tax Court · 1969
- Bernuth v. CommissionerCourt of Appeals for the Second Circuit · 1972
- Bush 1 c/o Stonestreet Lands Co. v. CommissionerUnited States Tax Court · 1967
12 more not listed; retrieve them via the Exa API.