Oneal v. Commissioner
United States Tax Court
P invests in a coal tax shelter where he signs a "mining lease," which is actually a sublease, affording P the option of paying the royalty specified either by cash or a nonrecourse note. P also enters into a "contract for the sale of coal" with C, giving a nonrecourse note to C in exchange for funds C made available to P, which P then turned over to lessor. No coal was mined or produced under the foregoing lease during the taxable years.
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P invests in a coal tax shelter where he signs a "mining lease," which is actually a sublease, affording P the option of paying the royalty specified either by cash or a nonrecourse note. P also enters into a "contract for the sale of coal" with C, giving a nonrecourse note to C in exchange for funds C made available to P, which P then turned over to lessor. No coal was mined or produced under the foregoing lease during the taxable years. Held, minimum royalty provision in sec. 1.612-3(b)(3), Income Tax Regs., is valid following Wendland v. Commissioner, 79 T.C. 355 (1982), affd. per curiam…
1Opinion of the Court
Gerber, Judge:
Respondent determined deficiencies of the following amounts in petitioners’ 1977 and 1978 Federal income taxes:
Taxable
Docket No. year Deficiency Petitioners
12511-81 1977 $23,439 Oneal
10961-82 1978 17,767 Oneal
12512-81 1977 44,712 Lund
1978 30,326
The issues presented for consideration are: (1) Whether petitioners are entitled to deduct certain claimed "advanced minimum royalties” under section 1.612-3(b)(3), Income Tax Regs., and (2) whether damages should be awarded under section 6673.1
FINDINGS OF FACT
Some of the facts have been stipulated and are found accordingly. The…
2Cases cited10 opinions
- Surloff v. CommissionerUnited States Tax Court · 1983
- Abrams v. CommissionerUnited States Tax Court · 1984
- Elliott v. CommissionerUnited States Tax Court · 1985
- Wing v. CommissionerUnited States Tax Court · 1983
- Russell Redhouse, Jr. v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1984
5 more not listed; retrieve them via the Exa API.
3Cited by38 opinions
- Brown v. CommissionerUnited States Tax Court · 1985
- Capek v. CommissionerUnited States Tax Court · 1986
- Horn v. CommissionerUnited States Tax Court · 1988
- Hawkins v. CommissionerUnited States Tax Court · 1987
- Jack Brown and Clara Brown v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1986
33 more not listed; retrieve them via the Exa API.