American Liberty Oil Co. v. Commissioner

1. Petitioner's subsidiary acquired an oil and gas lease by the terms of which and an assignment of the lease by the lessee certain amounts were payable to the lessor and lessee solely out of a portion of the assignee's interest in oil and gas produced from the lease. Held, that the amounts derived by the assignee from the sale of oil and gas reserved by the lessor and lessee and paid to them are not taxable income of the assignee. 2. The petitioner acquired on May 28, 1932, in a nontaxable reorganization, property in Texas on which it subsequently paid state, county, and independent school…