Farmer v. Commissioner
United States Board of Tax Appeals
The taxpayer, owner in fee of land, leased the same for approximately $1 per acre for the purpose of exploration for oil and gas. He deducted from the amount so received from his lessees $1 per acre, as cost to him of the leasehold estate demised. Held: Commissioner committed no error in disallowing the deduction claimed by taxpayer.
1Opinion of the Court
*713OPINION.
Korner:
The taxpayer contends, (1) that when he purchased the lands in fee there was a known market value in the vicinity for the sale of oil and gas leases of $1 per acre, and that he should be allowed to allocate his cost of purchase between the value of the land and the value of his privilege to lease the land for oil and gas exploration and exploitation; (2) that the leases executed by him constituted a horizontal severance of the premises and were a conveyance in fee of the oil and gas in place beneath the surface at a definitely ascertained selling price, and (3) that from such…
2Cases cited3 opinions
- Stephens County v. Mid-Kansas Oil & Gas Co.Texas Supreme Court · 1923
- Hitson v. GilmanCourt of Appeals of Texas · 1920
- Jones v. MurphyCourt of Appeals of Texas · 1923
3Cited by6 opinions
- Koch v. CommissionerUnited States Tax Court · 1978
- Michaelis v. CommissionerUnited States Tax Court · 1970
- Farmer v. CommissionerUnited States Board of Tax Appeals · 1925
- Koch v. CommissionerUnited States Tax Court · 1978
- Oak Woods Cemetery Ass'n v. CommissionerUnited States Board of Tax Appeals · 1938
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