Edwards Drilling Co. v. Commissioner
United States Board of Tax Appeals
1. The petitioner drilled oil wells for others for specified amounts payable out of the proceeds derived from the sale of a proportion of the first oil produced and saved from the property.
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1. The petitioner drilled oil wells for others for specified amounts payable out of the proceeds derived from the sale of a proportion of the first oil produced and saved from the property. The rights thus acquired to future income are contingent and the fair market value thereof is not accruable as taxable income. 2. The drilling of the wells did not result in the acquisition of a capital asset by the petitioner and costs incurred by it in completing the wells are deductible as ordinary and necessary business expenses.
1Opinion of the Court
EDWARDS DRILLING COMPANY, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
Edwards Drilling Co. v. Commissioner
Docket No. 75931.
United States Board of Tax Appeals
35 B.T.A. 341; 1937 BTA LEXIS 887;
January 27, 1937, Promulgated
1. The petitioner drilled oil wells for others for specified amounts payable out of the proceeds derived from the sale of a proportion of the first oil produced and saved from the property. The rights thus acquired to future income are contingent and the fair market value thereof is not accruable as taxable income.
2. The drilling of the wells did not result in…
2Cases cited13 opinions
- United States v. AndersonSupreme Court of the United States · 1926
- North American Oil Consolidated v. BurnetSupreme Court of the United States · 1932
- Lucas v. American Code Co.Supreme Court of the United States · 1930
- Burnet v. LoganSupreme Court of the United States · 1931
- United States v. Dakota-Montana Oil Co.Supreme Court of the United States · 1933
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