Scurlock v. Sherman

This is a suit to recover income taxes in the amount of $770.35, which the appellee paid under protest to the appellant. The issue narrows down to the question of whether the appellee was entitled to deduct from his 1952 taxable income certain contributions which he made to unsuccessful oil and gas operations conducted outside the state. The effect of the chancellor’s decree is to uphold the deductibility of these expenditures.

By a written contract dated May 1, 1952, the appellee agreed to reimburse four nonresident oil and gas operators for one-eighth of their expenses in the search for oil…