Freede v. Commissioner
United States Tax Court
Petitioners, as owners of fractions of the working interests in an oil and gas lease, were subject to contracts for the sale of natural gas to OG & E for 20 years. The contracts obligated OG & E to take or pay for a minimum of 80 percent of the deliverable gas from the leases. If the amounts paid exceeded the value of the gas actually delivered, OG & E was entitled to gas actually produced in the later years equal to the excess without additional payment.
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Petitioners, as owners of fractions of the working interests in an oil and gas lease, were subject to contracts for the sale of natural gas to OG & E for 20 years. The contracts obligated OG & E to take or pay for a minimum of 80 percent of the deliverable gas from the leases. If the amounts paid exceeded the value of the gas actually delivered, OG & E was entitled to gas actually produced in the later years equal to the excess without additional payment. In 1979, the payments by OG & E exceeded the value of gas actually delivered. The projected reserves were adequate to supply OG & E with…
1Opinion of the Court
OPINION
GOFFE, Judge:*
The Commissioner determined the following deficiencies in petitioners’ Federal income taxes for the taxable years 1978 and 1979:
Petitioner Taxable year Deficiency
H. J. and Josephine W. Freede 1978 $105,758/53
1979 551,348.33
Roger S. and Mary M. Folsom 1978 8,056.00
1979 97,444.00
The two cases, docket Nos. 16339-82 and 20768-82, were consolidated for trial, briefing, and opinion. The parties have settled numerous adjustments determined by the Commissioner in the statutory notices of deficiency. The sole issue for decision is whether petitioners are required to include in…
2Cases cited13 opinions
- Palmer v. BenderSupreme Court of the United States · 1932
- Commissioner v. Southwest Exploration Co.Supreme Court of the United States · 1956
- Thomas v. PerkinsSupreme Court of the United States · 1937
- Schulde v. CommissionerSupreme Court of the United States · 1963
- Helvering v. Bankline Oil Co.Supreme Court of the United States · 1938
8 more not listed; retrieve them via the Exa API.
3Cited by10 opinions
- Deskins v. CommissionerUnited States Tax Court · 1986
- Gulf Oil Corp. v. CommissionerUnited States Tax Court · 1986
- H.J. Freede Josephine W. Freede Roger S. Folsom and Mary M. Folsom v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1989
- Herbel v. CommissionerUnited States Tax Court · 1996
- Bishop v. CommissionerUnited States Tax Court · 1989
5 more not listed; retrieve them via the Exa API.