Peabody Natural Res. Co. v. Comm'r
United States Tax Court
A partnership exchanged operating gold mines, including realty, for operating coal mines. The coal mines were subject to two coal supply contracts that obligated the mine owner to provide electric utilities with coal. The benefits and obligations under the contracts were governed by New Mexico law. The gold mines were not subject to supply contracts. The partnership treated the entire exchange as "tax free" under sec. 1031, I.R.C.
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A partnership exchanged operating gold mines, including realty, for operating coal mines. The coal mines were subject to two coal supply contracts that obligated the mine owner to provide electric utilities with coal. The benefits and obligations under the contracts were governed by New Mexico law. The gold mines were not subject to supply contracts. The partnership treated the entire exchange as "tax free" under sec. 1031, I.R.C. R determined that the coal supply contracts were not real property and/or like-kind property and constituted "boot" so that the value of the supply contracts would…
1Opinion of the Court
OPINION
Gerber, Chief Judge:
The parties filed motions for summary judgment1 under Rule 1212 at docket No. 20328-04 with respect to the issue of whether coal supply contracts that burdened coal mine property received by a partnership, as part of an exchange under section 1031, are like-kind property to the gold mining property transferred by the partnership.
Background
On June 25, 1993, Peabody Natural Resources Co. (a partnership then known as Hanson Natural Resources Co.) (Peabody) transferred the assets of its gold mining business to Santa Fe Pacific Mining Corp. (Santa Fe), an unrelated…
2Cases cited24 opinions
- Sundstrand Corporation v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1994
- Sundstrand Corp. v. CommissionerUnited States Tax Court · 1992
- Commissioner v. P. G. Lake, Inc.Supreme Court of the United States · 1958
- Florida Peach Corp. v. CommissionerUnited States Tax Court · 1988
- Craig v. Comm'rUnited States Tax Court · 2002
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3Cited by2 opinions
- Peabody Natural Res. Co. v. Comm'rUnited States Tax Court · 2006
- Peabody Natural Resources Company, f.k.a. Hanson Natural Resources Company, Cavenham Forest Industries, Inc., A Partner Other Than The Tax Matters Partner v. CommissionerUnited States Tax Court · 2006