Hedges v. Commissioner
United States Tax Court
Petitioner entered into several partnership or joint ventures for drilling and developing oil and gas wells. The partnerships contracted to pay the promoter-operators, as drilling contractors, a fixed price for drilling the wells, and petitioner paid his proportionate share. The promoter-operators subcontracted the work of actually cutting the holes in the ground and paid the subcontractors less than the fixed prices received from the joint ventures.
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Petitioner entered into several partnership or joint ventures for drilling and developing oil and gas wells. The partnerships contracted to pay the promoter-operators, as drilling contractors, a fixed price for drilling the wells, and petitioner paid his proportionate share. The promoter-operators subcontracted the work of actually cutting the holes in the ground and paid the subcontractors less than the fixed prices received from the joint ventures. Held, petitioner may deduct as intangible drilling and development expenses the amounts he paid the promoter-operators.
1Opinion of the Court
G. F. Hedges, Jr., and Mary Helen Hedges, Petitioners, v. Commissioner of Internal Revenue, Respondent
Hedges v. Commissioner
Docket No. 295-62
United States Tax Court
41 T.C. 695; 1964 U.S. Tax Ct. LEXIS 140; 20 Oil & Gas Rep. 645;
February 28, 1964, Filed
Decision will be entered under Rule 50.
Petitioner entered into several partnership or joint ventures for drilling and developing oil and gas wells. The partnerships contracted to pay the promoter-operators, as drilling contractors, a fixed price for drilling the wells, and petitioner paid his proportionate share. The promoter-operators…
2Cases cited7 opinions
- Berkshire Oil Co. v. CommissionerUnited States Tax Court · 1947
- Commissioner of Internal Revenue v. AmbroseCourt of Appeals for the Fifth Circuit · 1942
- Hedges v. CommissionerUnited States Tax Court · 1964
- Manahan Oil Co. v. CommissionerUnited States Tax Court · 1947
- Retsal Drilling Co. v. CommissionerCourt of Appeals for the Fifth Circuit · 1942
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