Burns v. Commissioner
United States Tax Court
Petitioners purchased working interests in oil and gas leases and entered into turnkey drilling and completion contracts and other agreements with the sellers-promoters. Petitioners paid in cash the full amounts of "intangible drilling and development costs" allowable in sec. 1.612-4, Income Tax Regs.
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Petitioners purchased working interests in oil and gas leases and entered into turnkey drilling and completion contracts and other agreements with the sellers-promoters. Petitioners paid in cash the full amounts of "intangible drilling and development costs" allowable in sec. 1.612-4, Income Tax Regs. However, 50 percent of such costs were simultaneously returned to petitioners by use of bank loans made to them equal to 50 percent of the costs, fully collateralized by certificates of deposit pledged by the promoters. Repayments of the loans were from 50 percent of the net profits from…
1Opinion of the Court
Goffe, Judge. *
The Commissioner determined the following deficiencies in petitioners’ Federal income taxes:
Petitioners Docket No. Year Deficiency
Richard L. Burns
and Joyce C. Burns.7139-79 1975 $17,473
1976 22,238
Stanley L. Ross and Phyliss Ross. 9564-79 1975 22,963
C. Hayden Atchison and Ruth Atchison.9914-79 1975 3,789
Harry L. Hawkinson, Jr., and Elizabeth G. Hawkinson.9915-79 1975 5,583
Raymond G. Larson and Lois S. Larson.9916-79 1975 5,738
William T. Stokes and Fiona D. Stokes.9917-79 1975 1,850
The sole issue remaining for decision2 is whether petitioners are entitled to deduct as intangible…
2Cases cited19 opinions
- Frank Lyon Co. v. United StatesSupreme Court of the United States · 1978
- United States v. PhellisSupreme Court of the United States · 1921
- Burton-Sutton Oil Co. v. CommissionerSupreme Court of the United States · 1946
- Commissioner v. Southwest Exploration Co.Supreme Court of the United States · 1956
- Helvering v. Elbe Oil Land Development Co.Supreme Court of the United States · 1938
14 more not listed; retrieve them via the Exa API.
3Cited by19 opinions
- Rice's Toyota World, Inc. v. CommissionerUnited States Tax Court · 1983
- Packard v. CommissionerUnited States Tax Court · 1985
- Stephen A. Keller and Ethel L. Keller v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1984
- McAlister v. CommissionerUnited States Tax Court · 1989
- Hudson v. CommissionerUnited States Tax Court · 1994
14 more not listed; retrieve them via the Exa API.