Southwest Exploration Co. v. Commissioner
United States Tax Court
1. Petitioner was granted the drilling and development rights in certain submerged oil property by the State of California. Under the terms of such grant petitioner was required to drill certain offset wells. Upon completion thereof, petitioner was to continue uninterrupted drilling operations until a total of 83 wells were thus drilled.
Read the full summary
1. Petitioner was granted the drilling and development rights in certain submerged oil property by the State of California. Under the terms of such grant petitioner was required to drill certain offset wells. Upon completion thereof, petitioner was to continue uninterrupted drilling operations until a total of 83 wells were thus drilled. Held: The drilling of wells during 1939 to 1943, inclusive, subsequent to the required number of offset wells was a part of the consideration for acquisition of the drilling rights from the State of California and as such the intangible drilling costs…
1Opinion of the Court
OPINION.
Van Fossan, Judge:
This case presents two questions. The first is whether petitioner may properly deduct the so called intangible drilling costs of certain oil wells drilled by it during the years 1939 to 1942, inclusive.
Petitioner claims the right to the deduction here in dispute by virtue of the option granted in Regulations 111, section 29.23 (m)-16.1
Respondent contends that the regulations cited and relied upon by petitioner are inapplicable to the present factual situation. He argues that the drilling of the wells in question constituted part of the consideration for the Agreement…
2Cases cited15 opinions
- Palmer v. BenderSupreme Court of the United States · 1932
- United States v. CaliforniaSupreme Court of the United States · 1947
- Burton-Sutton Oil Co. v. CommissionerSupreme Court of the United States · 1946
- Anderson v. HelveringSupreme Court of the United States · 1940
- Lynch v. Alworth-Stephens Co.Supreme Court of the United States · 1925
10 more not listed; retrieve them via the Exa API.
3Cited by10 opinions
- Commissioner v. Southwest Exploration Co.Supreme Court of the United States · 1956
- Morrisdale Coal Mining Co. v. CommissionerUnited States Tax Court · 1952
- Commissioner of Internal Revenue v. Southwest Exploration Company, a CorporationCourt of Appeals for the Ninth Circuit · 1955
- Huntington Beach Company v. United StatesUnited States Court of Claims · 1955
- Southwest Exploration Co. v. RiddellDistrict Court, S.D. California · 1964
5 more not listed; retrieve them via the Exa API.