F. H. E. Oil Co. v. Commissioner
United States Board of Tax Appeals
1. Where during the taxable year petitioner received as consideration for drilling an oil well for others, an oil payment contract which it capitalized on its books, but as to which it had received no assignment from the lessee of the fractional oil interest out of which the payment was to be made, petitioner is not the owner of any economic interest in the oil in place, is not entitled to depletion on any payment received under such contract, and should return as a part of…
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1. Where during the taxable year petitioner received as consideration for drilling an oil well for others, an oil payment contract which it capitalized on its books, but as to which it had received no assignment from the lessee of the fractional oil interest out of which the payment was to be made, petitioner is not the owner of any economic interest in the oil in place, is not entitled to depletion on any payment received under such contract, and should return as a part of its gross income all payments received during the taxable year and should deduct as ordinary and necessary business…
1Opinion of the Court
*133OPINION.
Black :
Issue 1. — We think this issue must be decided for petitioner in so far as the $10,184.04, received by petitioner during the taxable year from the Anderson lease oil payment is concerned. In consideration of petitioner’s drilling an oil well for the owners of the Anderson lease under a turnkey contract, petitioner was to receive $15,500 out of a certain percentage of the oil to be produced from the lease. No assignment or other conveyance was made to petitioner of the fractional oil interests out of which petitioner was to receive its $15,500. This oil payment contract appears…
2Cases cited6 opinions
- Thomas v. PerkinsSupreme Court of the United States · 1937
- Helvering v. Wilshire Oil Co.Supreme Court of the United States · 1939
- Helvering v. Bankline Oil Co.Supreme Court of the United States · 1938
- Helvering v. Elbe Oil Land Development Co.Supreme Court of the United States · 1938
- Helvering v. O'DONNELLSupreme Court of the United States · 1938
1 more not listed; retrieve them via the Exa API.
3Cited by4 opinions
- F. H. E. Oil Co. v. CommissionerUnited States Board of Tax Appeals · 1940
- Hardesty v. CommissionerUnited States Board of Tax Appeals · 1941
- Lee v. CommissionerUnited States Board of Tax Appeals · 1940
- Louisiana Iron & Supply Co. v. CommissionerUnited States Board of Tax Appeals · 1941