Geoghegan & Mathis, Inc. v. Commissioner
United States Tax Court
In 1959, taxpayer, an open-pit mining operator, acquired the fee title to a tract of land, containing commercially marketable limestone deposits, subject to a right-of-way for an existing gas pipeline. During the taxable year, taxpayer, in order to continue operations, obtained the release of the right-of-way in exchange for an alternative right-of-way and payment of the expenses of relocating the pipeline.
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In 1959, taxpayer, an open-pit mining operator, acquired the fee title to a tract of land, containing commercially marketable limestone deposits, subject to a right-of-way for an existing gas pipeline. During the taxable year, taxpayer, in order to continue operations, obtained the release of the right-of-way in exchange for an alternative right-of-way and payment of the expenses of relocating the pipeline. Held, such expenses constitute part of the cost of the mineral rights and are not currently deductible as development expenditures under sec. 616(a) or as ordinary and necessary business…
1Opinion of the Court
OPINION
TaNnbnwald, Judge:
Respondent determined deficiencies in the income taxes of petitioner as follows:
FYE- Deficiency
Feb. 28, 1963_$7, 924. 65
Feb. 29, 1964_ 6,469. 53
Feb. 28, 1965_15,917. 53
The parties have disposed of all the issues except that relating to a deduction in 1965 under section 616(a) or section 162(a)1 for a certain claimed development expenditure relating to petitioner’s limestone quarry.
All of the facts have been stipulated and are found accordingly.
Petitioner, Geoghegan & Mathis, Inc., is a Kentucky corporation whose principal place of business, at the time of filing the…
2Cases cited23 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Commissioner v. Southwest Exploration Co.Supreme Court of the United States · 1956
- Commissioner of Internal Revenue v. RayCourt of Appeals for the Fifth Circuit · 1954
- Ray v. CommissionerUnited States Tax Court · 1952
- Hotel Sulgrave, Inc. v. CommissionerUnited States Tax Court · 1954
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3Cited by14 opinions
- Anderson v. CommissionerUnited States Tax Court · 1984
- Geoghegan & Mathis, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1972
- H. G. Fenton Material Co. v. CommissionerUnited States Tax Court · 1980
- Cushing Stone Co. v. United StatesUnited States Court of Claims · 1976
- Fiore v. CommissionerUnited States Tax Court · 1979
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