Nathaniel C. Wood and Gertrude L. Wood v. United States

THORNBERRY, Circuit Judge:

This appeal presents a question of proper tax treatment of compensation received under a contract permitting removal of sand and gravel from appellant taxpayer’s land. Taxpayer argues that the contract was in essence a sale of the minerals in place and that payment received should be taxed as long-term capital gains. The government argues that the contract constituted a mineral lease and that the payments received are taxable as ordinary income subject to a five per cent depletion allowance. The district court held for the government. We affirm.

Mr. and Mrs. Wood own…