Hunt v. Commissioner

McCORD, Circuit Judge.

Hassie Hunt is engaged in the business of developing and operating oil and gas leases. In his income tax return for 1939 he deducted as intangible drilling and development costs the sum of $106,567.33 expended by him during the tax year in connection with the drilling of six oil wells upon five leases. The wells were drilled by Hunt with his own labor, equipment, and employees. The Commissioner disallowed the deduction on the ground that the development costs were capital expenditures and not deductible as expense. In sustaining the determination of the Commissioner, the…