McAdams v. Commissioner of Internal Revenue

As posed by the Tax Court,

“The sole question is whether the pe-tioners are entitled to deductions of $21,500 in 1944 and $2,225.59 in 1945 for amounts expended in those years to reimburse a co-owner of oil leases for expenditures made by him in 1941 in connection with the drilling and development of oil wells.”

The petitioners made income tax returns on a cash basis. On the authority of Helvering v. Price, 309 U.S. 409, 60 S.Ct. 673, 84 L.Ed. 836; Eckert v. Burnet, 283 U.S. 140, 51 S.Ct. 373, 75 L.Ed. 911, and P. G. Lake, Inc., v. Commissioner, 5 Cir., 148 F.2d 898, they insist that they have…