Grandview Mines v. Commissioner
United States Tax Court
Grandview Mines leased its property in 1950 to American Zinc, Lead and Smelting Company for one-half of the net profits from the mining and extraction of minerals from its property. Net profits were defined as total receipts less expenses of operation.
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Grandview Mines leased its property in 1950 to American Zinc, Lead and Smelting Company for one-half of the net profits from the mining and extraction of minerals from its property. Net profits were defined as total receipts less expenses of operation. In 1951, the contract was altered to provide that Grandview Mines would receive 46 1/2 per cent of net profits, retroactive to the first of 1950. Grandview Mines computed percentage depletion on the basis of total receipts of the operation and in 1951 paid to American Zinc, Lead and Smelting Company $ 18,957.20 to equalize profits under the…
1Opinion of the Court
Teain, Judge:
Respondent determined deficiencies in petitioner’s income taxes and petitioner asserts overpayments in the years and amounts as follows:
Year Deficiency Overpayment
1950-$55,928.82 $5,220.42
1951- 68,985.30 11,981.86
1952- 71,594.66 _
1953_ 807. 59 _
The issues are:
1. Whether petitioner’s depletion computation should have been based on a percentage of gross income or net income from the property;
2. Whether the payment of $18,957.20 to the American Zinc, Lead and Smelting Company in the year 1951 was deductible as an ordinary and necessary business expense; and
3. Whether petitioner was…
2Cases cited8 opinions
- North American Oil Consolidated v. BurnetSupreme Court of the United States · 1932
- United States v. LewisSupreme Court of the United States · 1951
- Magruder v. SuppleeSupreme Court of the United States · 1942
- Kirby Petroleum Co. v. CommissionerSupreme Court of the United States · 1946
- Commissioner of Internal Rev. v. JS Abercrombie Co.Court of Appeals for the Fifth Circuit · 1947
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3Cited by17 opinions
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- Equitable Life Insurance Company of Iowa and Bankers Life Company v. United StatesCourt of Appeals for the Eighth Circuit · 1965
- Cinergy Corp. v. United StatesUnited States Court of Federal Claims · 2003
- Callahan Mining Corp. v. CommissionerUnited States Tax Court · 1969
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