Berkshire Oil Co. v. Commissioner
United States Tax Court
1. The taxpayer corporation acquired leases on several properties in consideration of cash, the drilling of oil wells within a fixed time, and the payment of a royalty on oil or minerals extracted. It incurred intangible drilling and development costs which it deducted as expenses.
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1. The taxpayer corporation acquired leases on several properties in consideration of cash, the drilling of oil wells within a fixed time, and the payment of a royalty on oil or minerals extracted. It incurred intangible drilling and development costs which it deducted as expenses. Such costs held not deductible as expenses because part of the cost of the lease acquired and hence a capital investment. 2. The option given by section 19.23(m)-16, Regulations 103, to treat such costs as expense or capital, held inapplicable to costs incurred in drillings which are made in performance of a…
1Opinion of the Court
Berkshire Oil Company, Petitioner, v. Commissioner of Internal Revenue, Respondent
Berkshire Oil Co. v. Commissioner
Docket No. 9382
United States Tax Court
9 T.C. 903; 1947 U.S. Tax Ct. LEXIS 36;
November 6, 1947, Promulgated
Decision will be entered under Rule 50.
1. The taxpayer corporation acquired leases on several properties in consideration of cash, the drilling of oil wells within a fixed time, and the payment of a royalty on oil or minerals extracted. It incurred intangible drilling and development costs which it deducted as expenses. Such costs held not deductible as expenses because part…
Also in this document: Dissent.
2Cases cited8 opinions
- Lee v. GiauqueSupreme Court of Louisiana · 1923
- Berkshire Oil Co. v. CommissionerUnited States Tax Court · 1947
- F. H. E. Oil Co. v. CommissionerUnited States Tax Court · 1944
- Manahan Oil Co. v. CommissionerUnited States Tax Court · 1947
- Anvil Hydraulic & Drainage Co. v. CodeCourt of Appeals for the Ninth Circuit · 1910
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