Badger Oil Co. v. Commissioner of Internal Revenue

SIBLEY, Circuit Judge.

The taxpayer, Badger Oil Company, owning aj producing oil lease on Texas land, and having afterwards acquired title to the fee in the land except about one-third of the one-eighth royalty, in the tax year 1935 transferred the lease to International Petroleum Corporation for $200,-000 in cash and $165,000 in secured notes which were paid off during the year. Of the $365,000 received, $60,000 was for personal property, $305,000 for the oil property. The taxpayer claimed a percentage deduction for depletion against the $305,-000, but it was denied by the Commissioner and by…