Standard Oil Co. v. Commissioner
United States Tax Court
In 1955 T assigned gas rights in certain oil and gas leases in return for annual payments based on the volume of actual or possible gas production. Apart from a cash payment for physical equipment and facilities, T received no present consideration and looked solely to the deferred annual payments in respect of gas production or potential gas production as consideration for the gas reserves themselves.
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In 1955 T assigned gas rights in certain oil and gas leases in return for annual payments based on the volume of actual or possible gas production. Apart from a cash payment for physical equipment and facilities, T received no present consideration and looked solely to the deferred annual payments in respect of gas production or potential gas production as consideration for the gas reserves themselves. No limit was placed on the amount of such payments, and the assignee was not permitted to sell any of the assigned gas rights without the consent of T. In 1958 the parties modified the…
1Opinion of the Court
OPINION
Naum, Judge:
The dispute between petitioner and the Commissioner centers on whether during the years in issue Pan American retained an “economic interest” in the properties transferred to Pacific. The parties appear to agree that if Pan American retained an economic interest in the properties, Pan American’s receipts in 1958 and 1959 represent ordinary income to it, subject to depletion, but that if it retained no such interest, the receipts reflect capital gain realized by Pan American on the sale of property used in its trade or business.
The petitioner contends that as of January 1,…
2Cases cited19 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- Helvering v. CliffordSupreme Court of the United States · 1940
- Burnet v. HarmelSupreme Court of the United States · 1932
- Old Colony Trust Co. v. CommissionerSupreme Court of the United States · 1929
- Palmer v. BenderSupreme Court of the United States · 1932
14 more not listed; retrieve them via the Exa API.
3Cited by1 opinion
- Standard Oil Co. v. CommissionerUnited States Tax Court · 1970