Island Gas, Inc. v. Commissioner
United States Tax Court
Petitioner, an accrual basis taxpayer, agreed to pay Kuhn the sum of $ 175,500 advanced by him for drilling 9 gas wells on leaseholds owned three-fourths by petitioner and one-fourth by Kuhn.
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Petitioner, an accrual basis taxpayer, agreed to pay Kuhn the sum of $ 175,500 advanced by him for drilling 9 gas wells on leaseholds owned three-fourths by petitioner and one-fourth by Kuhn. Of that amount petitioner allocated $ 139,327.30 to intangible development costs and deducted it as an expense for the year 1950, under Regulations 111, section 29.23 (m)-16. Commissioner determined that only $ 6,700.53 of the total amount of intangible development costs was actually repaid to Kuhn, a cash basis taxpayer and a controlling stockholder, within 1950 and 2 1/2 months thereafter. Disallowance…
1Opinion of the Court
Harrow, Judge:
The Commissioner determined deficiencies in income tax for the years 1951,1952, and 1953 in the respective amounts of $6,938.63, $2,352.64, and $748.38. The year 1950 is involved because petitioner claims a deduction in 1950, which if allowed results in a net operating loss for 1950 which petitioner would be entitled to carry over to the taxable years.
The issues to be decided involve the provisions of section 24 (c) of the 1939 Code, which the respondent has determined bar deduction in 1950 of intangible development costs of gas wells in the amount of $132,626.77, and the…
2Cases cited7 opinions
- United States v. AndersonSupreme Court of the United States · 1926
- McAdams v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1952
- Platt Trailer Co. v. CommissionerUnited States Tax Court · 1955
- Wisconsin Memorial Park Company v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1958
- Wooten v. CommissionerUnited States Tax Court · 1949
2 more not listed; retrieve them via the Exa API.
3Cited by12 opinions
- Graf v. CommissionerUnited States Tax Court · 1983
- Rife v. CommissionerUnited States Tax Court · 1964
- M. O. Rife and Maidee W. Rife v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1966
- Tatum v. CommissionerUnited States Tax Court · 1966
- Green Leaf Ventures v. CommissionerUnited States Tax Court · 1995
7 more not listed; retrieve them via the Exa API.