Larsen v. Commissioner
United States Tax Court
Petitioners undertook to obtain mineral leases from all or most of the landowners in two large areas. They obtained leases from some landowners but not from others. Held, the costs allocable to unsuccessful negotiations are deductible as losses incurred in transactions entered into for profit.
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Petitioners undertook to obtain mineral leases from all or most of the landowners in two large areas. They obtained leases from some landowners but not from others. Held, the costs allocable to unsuccessful negotiations are deductible as losses incurred in transactions entered into for profit. Held, further, in the absence of objections from respondent or specific evidence, petitioners' method of allocation of expenses between successful and unsuccessful lease negotiations on the basis of the respective acreages involved is accepted.
1Opinion of the Court
OPINION
Hall, Judge:
Respondent determined the following income tax deficiencies for petitioners in the following years:
Petitioner Year Deficiency
Larsen_ 1968 $12,144.91
1969 4,490.55
1970 4,399.76
Williams_ 1968 12,301.35
1969 5,862.83
1970 3,137.89
These consolidated cases were submitted fully stipulated under Rule 122. Concessions having been made by the parties, the sole issue remaining is whether expenses incurred in connection with unsuccessful attempts to acquire oil and gas leases are deductible or instead must be capitalized as part of the cost of other oil and gas leases obtained in the…
2Cases cited5 opinions
- Commissioner v. MunterSupreme Court of the United States · 1947
- Seed v. CommissionerUnited States Tax Court · 1969
- Thompson v. CommissionerUnited States Board of Tax Appeals · 1928
- Munger v. CommissionerUnited States Tax Court · 1950
- Warner Mountains Lumber Co. v. CommissionerUnited States Tax Court · 1947
3Cited by8 opinions
- Estate of Boyd v. CommissionerUnited States Tax Court · 1981
- Robert C. Honodel and Claire E. Honodel v. Commissioner of the Internal RevenueCourt of Appeals for the Ninth Circuit · 1984
- Nicolazzi v. CommissionerUnited States Tax Court · 1982
- TOOKE v. COMMISSIONERUnited States Tax Court · 1977
- Amadori v. CommissionerUnited States Tax Court · 1984
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