Horton v. Commissioner
United States Tax Court
Petitioner and Lee, the owner of a mining concession in Mexico, entered into an agreement whereby the latter assigned to petitioner the privilege of developing the property for a period of nine years, and petitioner agreed to supply the funds necessary to put the property in a "good and proper state of exploitation."
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Petitioner and Lee, the owner of a mining concession in Mexico, entered into an agreement whereby the latter assigned to petitioner the privilege of developing the property for a period of nine years, and petitioner agreed to supply the funds necessary to put the property in a "good and proper state of exploitation." It was also agreed that the total value of the net products of the mine should be divided as follows: 100 per cent to petitioner until he was reimbursed for expenditures made in preparing property for exploitation; thereafter 60 per cent to Lee and 40 per cent to petitioner until…
1Opinion of the Court
OPINION.
Harlan, Judge:
Petitioner contends that 60 per cent of the net profits from the operation of El Fenómeno mine is excludible by him in computing his taxable income for the taxable years.
Subsequent to the trial in this proceeding, the Supreme Court of the United States, on April 22, 1946, rendered its decision in Burton-Sutton Oil Co. v. Commissioner 328 U. S. 25, which case, in its essential facts, is on all fours with the instant proceeding. The Court held that payments by a lessee to a lessor of a proportion of the profits from mining operations constituted rents or royalties and not…
2Cases cited1 opinion
- Burton-Sutton Oil Co. v. CommissionerSupreme Court of the United States · 1946
3Cited by3 opinions
- Manahan Oil Co. v. CommissionerUnited States Tax Court · 1947
- Horton v. CommissionerUnited States Tax Court · 1946
- Manahan Oil Co. v. CommissionerUnited States Tax Court · 1947