Landreth v. Commissioner
United States Tax Court
The petitioner sold working interests in certain oil and gas leases to B, retaining production payments which he then sold to C, a partnership with substantial net worth. C financed the purchase by obtaining a loan from a bank. To induce the bank to make the loan to C, the petitioner agreed, if requested to do so on the maturity of the note, to find a purchaser for the note, or purchase it himself, for a sum equal to the unpaid balance plus accrued interest.
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The petitioner sold working interests in certain oil and gas leases to B, retaining production payments which he then sold to C, a partnership with substantial net worth. C financed the purchase by obtaining a loan from a bank. To induce the bank to make the loan to C, the petitioner agreed, if requested to do so on the maturity of the note, to find a purchaser for the note, or purchase it himself, for a sum equal to the unpaid balance plus accrued interest. Held: The petitioner's agreement with the bank did not constitute a guarantee of the production payments, and after their sale, the…
1Opinion of the Court
Simpson, Judge:
The respondent determined a deficiency in the petitioners’ income tax of $184.92 for the taxable year ended December 31, 1962. The sole issue for decision is whether the petitioner Mr. Landreth constructively received additional income by reason of his having, in effect, guaranteed a loan made by a bank to a partnership which purchased an oil and gas production payment from him in an ABC transaction.
FINDINGS OP PACT
Some of the facts are stipulated, and those facts are so found.
George H. Landreth and Alice J. Landreth are husband and wife who resided in Midland, Tex., at the…
2Cases cited11 opinions
- Palmer v. BenderSupreme Court of the United States · 1932
- United States v. Kirby Lumber CoSupreme Court of the United States · 1931
- Commissioner v. BrownSupreme Court of the United States · 1965
- Anderson v. HelveringSupreme Court of the United States · 1940
- Thomas v. PerkinsSupreme Court of the United States · 1937
6 more not listed; retrieve them via the Exa API.
3Cited by19 opinions
- Merkel v. CommissionerUnited States Tax Court · 1997
- C.B. And Ida N. Christie v. United StatesCourt of Appeals for the Fifth Circuit · 1971
- Finley W. Holbrook and Faith Holbrook v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1971
- Commissioner v. Estate of DonnellCourt of Appeals for the Fifth Circuit · 1969
- Holbrook v. CommissionerUnited States Tax Court · 1970
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