Producers Chemical Co. v. Commissioner
United States Tax Court
Petitioner purchased interests in oil leases for a consideration of a cash payment with the sellers retaining production payments payable from 85 percent as to all but one lease and 95 percent as to that lease of the production of the interest sold.
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Petitioner purchased interests in oil leases for a consideration of a cash payment with the sellers retaining production payments payable from 85 percent as to all but one lease and 95 percent as to that lease of the production of the interest sold. Held: (1) A part of petitioner's operating costs to produce oil and gas from the leases represents costs of acquiring the leases; (2) allocated overhead expenses and depreciation are part of operating costs to produce the oil and gas from the leases; and (3) under the facts of this case fracturing costs are development expenses and deductible as…
1Opinion of the Court
Scott, Judge:
Bespondent determined deficiencies in petitioner’s income tax for the fiscal years ending March 31,1962,1963,1964, and 1965, in the amounts of $155,141.54, $105,454.16, $40,298.23, and $36,585.91, respectively.
The issues for decision are:(1) Whether petitioner who purchased a working interest in oil leases with the sellers retaining production payments payable from 85 or 95 percent of the interest conveyed, may deduct all its expenses of producing oil from the leases or is required to capitalize the part of such amounts applicable to producing the oil to be received by the…
2Cases cited22 opinions
- Thomas v. PerkinsSupreme Court of the United States · 1937
- Ben Perlmutter and Bernice Perlmutter v. Commissioner of Internal Revenue, the Perlmutters, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1967
- Perlmutter v. CommissionerUnited States Tax Court · 1965
- Shainberg v. CommissionerUnited States Tax Court · 1959
- Great Northern Railway Co. v. CommissionerUnited States Board of Tax Appeals · 1927
17 more not listed; retrieve them via the Exa API.
3Cited by10 opinions
- Commissioner v. Idaho Power Co.Supreme Court of the United States · 1974
- Idaho Power Company v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1973
- L. W. Brooks, Jr. And Jane R. Brooks v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1970
- Elwood v. CommissionerUnited States Tax Court · 1979
- Louisiana Land & Exploration Co. v. CommissionerUnited States Tax Court · 1994
5 more not listed; retrieve them via the Exa API.