Driscoll v. Commissioner
United States Tax Court
The lessee of an oil lease mortgaged an interest in the lease to secure payment of his personal indebtedness to a bank, and assigned to the bank the oil to be produced thereunder for the purpose of having the income from the oil applied to the payment of the indebtedness. The interest of the original lessee in the lease was later assigned to petitioner, who took it subject to the mortgage and assignment.
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The lessee of an oil lease mortgaged an interest in the lease to secure payment of his personal indebtedness to a bank, and assigned to the bank the oil to be produced thereunder for the purpose of having the income from the oil applied to the payment of the indebtedness. The interest of the original lessee in the lease was later assigned to petitioner, who took it subject to the mortgage and assignment. Held, petitioner is not taxable on the income thereafter paid to the bank and applied on the indebtedness.
1Opinion of the Court
OPINION.
KeRN, Judge:
We conceive the problem presented here to be somewhat simpler than it seems to have appeared to the parties at the time of the hearing and briefing.
The respondent determined the petitioner to be taxable on certain payments made by the Phillips Petroleum Co. to the First National Bank in St. Louis in retirement of a $10,000 personal indebtedness incurred by an earlier owner of the one-sixteenth interest in an oil and gas lease now owned by petitioner. The indebtedness was evidenced by a promissory note, secured by a mortgage, executed by this former owner, on the…
2Cited by14 opinions
- Conant v. CommissionerUnited States Tax Court · 1946
- Stone v. CommissionerUnited States Tax Court · 1968
- Ashlock v. CommissionerUnited States Tax Court · 1952
- Loeb v. CommissionerUnited States Tax Court · 1945
- Rakowsky v. CommissionerUnited States Tax Court · 1951
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