P-M-K Petroleum Co. v. Commissioner
United States Board of Tax Appeals
1. Expenditures for fuel, wages, repairs, hauling, etc., in connection with the drilling of oil wells are capital expenses recoverable through depreciation rather than depletion. 2. Expenses of shooting oil wells with nitroglycerine incurred before the wells are placed in commercial production is a capital expense. 3. Costs incurred during period of commercial production for pulling rods and tubing, recupping the working barrels and cleaning out wells to restore such wells…
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1. Expenditures for fuel, wages, repairs, hauling, etc., in connection with the drilling of oil wells are capital expenses recoverable through depreciation rather than depletion. 2. Expenses of shooting oil wells with nitroglycerine incurred before the wells are placed in commercial production is a capital expense. 3. Costs incurred during period of commercial production for pulling rods and tubing, recupping the working barrels and cleaning out wells to restore such wells to original production, such recupping being made necessary by the fact that cups wear out in three or four months, and…
1Opinion of the Court
*364OPINION.
Van Fossan:
The first issue here presented was fully considered by the Board in A. T. Jergins Trust, 22 B. T. A. 551, where we held that expenditures for fuel, wages, repairs, hauling, etc., in connection with the drilling of oil and gas wells are capital expenses recoverable through depreciation rather than depletion. The contention of petitioner as to this group of expenditures is sustained.
The second item presented is the cost of shooting certain wells, petitioner here contending that the item should be charged to operation expenses rather than capital and in support of its position…
2Cited by6 opinions
- Vinton Petroleum Co. v. CommissionerUnited States Board of Tax Appeals · 1933
- Producers Chemical Co. v. CommissionerUnited States Tax Court · 1968
- Simms Petroleum Co. v. CommissionerUnited States Board of Tax Appeals · 1933
- P-M-K Petroleum Co. v. CommissionerUnited States Board of Tax Appeals · 1931
- Producers Chemical Co. v. CommissionerUnited States Tax Court · 1968
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