Transco Exploration Co. v. Commissioner
United States Tax Court
Petitioner was engaged in oil and gas exploration and production and was liable for windfall profit tax. Held, in calculating the net income limitation on windfall profit under sec. 4988, I.R.C., it was proper for petitioner to exclude from "taxable income from the property" a portion of lease bonuses which it paid and it was also proper for petitioner to capitalize a like amount in calculating "cost depletion" solely for purposes of the net income limitation.
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Petitioner was engaged in oil and gas exploration and production and was liable for windfall profit tax. Held, in calculating the net income limitation on windfall profit under sec. 4988, I.R.C., it was proper for petitioner to exclude from "taxable income from the property" a portion of lease bonuses which it paid and it was also proper for petitioner to capitalize a like amount in calculating "cost depletion" solely for purposes of the net income limitation. Woods Investment Co. v. Commissioner, 85 T.C. 274 (1985), followed.
1Opinion of the Court
Transco Exploration Company, Petitioner v. Commissioner of Internal Revenue, Respondent
Transco Exploration Co. v. Commissioner
Docket No. 5628-88
United States Tax Court
95 T.C. 373; 1990 U.S. Tax Ct. LEXIS 96; 95 T.C. No. 27; 111 Oil & Gas Rep. 196;
October 2, 1990, Filed
Decision will be entered for the petitioner.
Petitioner was engaged in oil and gas exploration and production and was liable for windfall profit tax. Held, in calculating the net income limitation on windfall profit under sec. 4988, I.R.C., it was proper for petitioner to exclude from "taxable income from the property" a portion…
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