Wing v. Commissioner
United States Tax Court
P owned a one-third interest in a coal mining joint venture which had made a valid election under sec. 761(a), I.R.C. 1954. P reported his income from the venture on the accrual method. On Oct. 20, 1977, P entered into a 10-year sublease agreement for the extraction of coal, whereby the joint venture would pay a "minimum royalty" of $ 6,000 per year for the life of the sublease. The "minimum royalty" was recoupable out of production from the reserves.
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P owned a one-third interest in a coal mining joint venture which had made a valid election under sec. 761(a), I.R.C. 1954. P reported his income from the venture on the accrual method. On Oct. 20, 1977, P entered into a 10-year sublease agreement for the extraction of coal, whereby the joint venture would pay a "minimum royalty" of $ 6,000 per year for the life of the sublease. The "minimum royalty" was recoupable out of production from the reserves. The $ 60,000 representing the total "minimum royalties" owing during the lease term was purportedly paid immediately in the form of $ 10,000…
1Opinion of the Court
Samuel E. Wing, Petitioner v. Commissioner of Internal Revenue, Respondent
Wing v. Commissioner
Docket No. 11994-81
United States Tax Court
81 T.C. 17; 1983 U.S. Tax Ct. LEXIS 62; 81 T.C. No. 3; 79 Oil & Gas Rep. 637;
July 11, 1983, Filed
Decision will be entered under Rule 155.
P owned a one-third interest in a coal mining joint venture which had made a valid election under sec. 761(a), I.R.C. 1954. P reported his income from the venture on the accrual method. On Oct. 20, 1977, P entered into a 10-year sublease agreement for the extraction of coal, whereby the joint venture would pay a "minimum…
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