Monrovia Oil Co. v. Commissioner
United States Board of Tax Appeals
1. ASSOCIATION. - Where the owners of an oil lease create a trust for the purpose of engaging in business for profit by prospecting and drilling for oil and the marketing thereof, and the trust issues common participating oil agreements to the owners of the lease in payment for their transfer of the lease and subsequently sells to some 200 persons 1,200 shares of preferred participating oil agreements at $100 per share, and engages in business during the taxable years under…
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1. ASSOCIATION. - Where the owners of an oil lease create a trust for the purpose of engaging in business for profit by prospecting and drilling for oil and the marketing thereof, and the trust issues common participating oil agreements to the owners of the lease in payment for their transfer of the lease and subsequently sells to some 200 persons 1,200 shares of preferred participating oil agreements at $100 per share, and engages in business during the taxable years under quasi-corporate form, such trust is an association taxable as a corporation. 2. INCOME OF THE ASSOCIATION. - The…
1Opinion of the Court
*340OPINION.
Black:
The issues raised by petitioner may be summarized as follows:
1. Is the Monrovia Oil Co. taxable as a trust or as a corporation ?
2. Do the amounts which were required, under the participating oil agreements, to be distributed to the agreement holders constitute taxable income to petitioner, or deductions in the determination of its net taxable income?
3. What was the value, for depletion purposes, of the sublease at the time acquired by petitioner ?
4. Do drilling costs of an oil well paid under a turnkey drilling contract constitute a capital item to be added to the depreciable…
2Cases cited13 opinions
- Hecht v. MalleySupreme Court of the United States · 1924
- United States v. Dakota-Montana Oil Co.Supreme Court of the United States · 1933
- Burnet v. A. T. Jergins TrustSupreme Court of the United States · 1933
- Petroleum Exploration v. BurnetSupreme Court of the United States · 1933
- Sunburst Oil & Refining Co. v. CommissionerUnited States Board of Tax Appeals · 1931
8 more not listed; retrieve them via the Exa API.
3Cited by7 opinions
- Producers Chemical Co. v. CommissionerUnited States Tax Court · 1968
- Dolese & Shepherd Co. v. CommissionerUnited States Board of Tax Appeals · 1934
- Swanson v. CommissionerUnited States Board of Tax Appeals · 1934
- Franklin Title & Trust Co. v. CommissionerUnited States Board of Tax Appeals · 1935
- Monrovia Oil Co. v. CommissionerUnited States Board of Tax Appeals · 1933
2 more not listed; retrieve them via the Exa API.