Cook Drilling Co. v. Commissioner
United States Board of Tax Appeals
1. OIL PAYMENT CONTRACTS. - Held, that the fair market value of contracts for future payments out of oil if, as, and when produced, in consideration for drilling certain oil wells and for the sale of oil and gas leases, is not includable in gross income; held, further, that oil payments actually collected on such contracts during the taxable year constituted gross income. 2. Id. - Held, that drilling costs incurred in drilling wells completed during the taxable year are…
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1. OIL PAYMENT CONTRACTS. - Held, that the fair market value of contracts for future payments out of oil if, as, and when produced, in consideration for drilling certain oil wells and for the sale of oil and gas leases, is not includable in gross income; held, further, that oil payments actually collected on such contracts during the taxable year constituted gross income. 2. Id. - Held, that drilling costs incurred in drilling wells completed during the taxable year are deductible as business expenses. Edwards Drilling Co.,35 B.T.A. 341; affd., 95 Fed.(2d) 719, followed. 3. Id. - Held, that…
1Opinion of the Court
OPINION.
Ttson:
The respondent has determined a deficiency of $5,548.04 in the petitioner’s income tax for the year 1982.
The petitioner reported the amount of $1,893.11 as its income derived from certain oil payment contracts, arrived at (1) by includ*292ing in gross income only the amounts collected in 1932 under drilling contracts completed in that year and under a contract of sale of two leases, and (2) by deducting the drilling cost of wells completed in 1932 as an expense, and the cost of the leases sold. The respondent determined that the petitioner derived an income of $46,302.59 during 1932…
2Cases cited8 opinions
- North American Oil Consolidated v. BurnetSupreme Court of the United States · 1932
- Burnet v. LoganSupreme Court of the United States · 1931
- Thomas v. PerkinsSupreme Court of the United States · 1937
- Helvering v. Mountain Producers Corp.Supreme Court of the United States · 1938
- Helvering v. Bankline Oil Co.Supreme Court of the United States · 1938
3 more not listed; retrieve them via the Exa API.
3Cited by6 opinions
- Cook Drilling Co. v. CommissionerUnited States Board of Tax Appeals · 1938
- Hardesty v. CommissionerUnited States Board of Tax Appeals · 1941
- Hunt Production Co. v. CommissionerUnited States Board of Tax Appeals · 1938
- Lee v. CommissionerUnited States Board of Tax Appeals · 1940
- Louisiana Iron & Supply Co. v. CommissionerUnited States Board of Tax Appeals · 1941
1 more not listed; retrieve them via the Exa API.