National Oil & Gas Co. v. Commissioner
United States Board of Tax Appeals
During the taxable year the petitioner became entitled to a certain amount of oil as his share of that produced under a lease. He disposed of only a portion thereof during the taxable year. His books were kept and his returns were made upon the basis of cash receipts and disbursements. Held, that a reasonable allowance for depletion is to be based upon the amount of oil sold, the proceeds of which are included in the return. Appeal of R. M. Waggoner,5 B.T.A. 1191, followed.
1Opinion of the Court
*400OPINION.
Phillips :
In computing the net income of the petitioner no allowance was made for depletion. It is now agreed between the parties that $1.575 per barrel is a reasonable depletion unit to be used in the computation of the deduction.
The parties also raise the question whether depletion allowance should be based upon the amount of oil produced, whether' or not sold in the taxable year and included in the income of that year, or upon the amount of the oil sold. Petitioner keeps its books upon a cash receipts and disbursements basis. Its share of the oil produced during the year was…
2Cited by2 opinions
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