Mascot Oil Co. v. Commissioner
United States Board of Tax Appeals
1. Petitioner is entitled to include in income from its oil property a bonus received for granting an exclusive right to drill for oil at depths below 1,600 feet, where it appears that there was production from wells on the same property less than 1,600 feet deep and notwithstanding there were no producing wells of the greater depth. 2. Taxpayer, a lessee of oil producing land, did not by an exclusive sublease of the right to drill to depths beyond 1,600 feet, create a new…
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1. Petitioner is entitled to include in income from its oil property a bonus received for granting an exclusive right to drill for oil at depths below 1,600 feet, where it appears that there was production from wells on the same property less than 1,600 feet deep and notwithstanding there were no producing wells of the greater depth. 2. Taxpayer, a lessee of oil producing land, did not by an exclusive sublease of the right to drill to depths beyond 1,600 feet, create a new "property" in the land below 1,600 feet, which property must stand on its own production in computing depletion, thereby…
1Opinion of the Court
OPINION.
Van Fossan :
In this case, in which a deficiency of $2,228.88 for the year 1928 was determined, the question is whether in computing depletion petitioner is entitled to include as income from its oil property a bonus received for granting an exclusive right to drill and explore at depths below 1,600 feet to a sublessee, it appearing that there was production of oil from wells of less than 1,600 feet (drilled by petitioner) and no production from wells deeper than 1,600 feet (drilled by the sublessee), or, to state it differently: Did petitioner by the execution of a sublease granting…
2Cases cited5 opinions
- Palmer v. BenderSupreme Court of the United States · 1932
- Lynch v. Alworth-Stephens Co.Supreme Court of the United States · 1925
- United States v. Biwabik Mining Co.Supreme Court of the United States · 1918
- Glide v. CommissionerUnited States Board of Tax Appeals · 1933
- Vinton Petroleum Co. v. CommissionerUnited States Board of Tax Appeals · 1933
3Cited by3 opinions
- Lloyd Corp. v. RiddellDistrict Court, S.D. California · 1963
- Cree v. CommissionerUnited States Board of Tax Appeals · 1942
- Mascot Oil Co. v. CommissionerUnited States Board of Tax Appeals · 1933