New York & Honduras Rosario Mining Co. v. Commissioner
United States Tax Court
The taxpayer mining company acquired and exercised mining rights in Honduras under a contract, ratified by an act of the Honduran Congress, whereby it agreed to pay 7 per cent of its net operating profits to the Honduran Government. Held: (1) Such payments were not an income tax paid to a foreign government within the meaning of section 131, Internal Revenue Code, which grants a credit for income taxes paid to a foreign government.
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The taxpayer mining company acquired and exercised mining rights in Honduras under a contract, ratified by an act of the Honduran Congress, whereby it agreed to pay 7 per cent of its net operating profits to the Honduran Government. Held: (1) Such payments were not an income tax paid to a foreign government within the meaning of section 131, Internal Revenue Code, which grants a credit for income taxes paid to a foreign government. (2) Such payments are deductible as a business expense.
1Opinion of the Court
OPINION.
Johnson, Judge'.
The facts were stipulated, together with certain exhibits attached thereto, and we adopt said stipulation and exhibits as our findings of fact.
From these we find petitioner is a domestic corporation, organized under the laws of the State of New York, with its principal office at 120 Broadway, New York City. It filed its Federal income tax returns for the calendar years 1941 and 1942 with the collector of internal revenue for the second district of New York on the accrual basis.
Since 1880 petitioner has been engaged in mining operations in Honduras, where it owns…
2Cases cited2 opinions
- Flint v. Stone Tracy Co.Supreme Court of the United States · 1911
- Burnet v. Chicago Portrait Co.Supreme Court of the United States · 1932
3Cited by11 opinions
- New York & H. Rosario Min. Co. v. Commissioner of Int. Rev.Court of Appeals for the Second Circuit · 1948
- Phillips Petroleum Co. v. CommissionerUnited States Tax Court · 1995
- Bank of Am. Trust & Sav. Ass'n v. CommissionerUnited States Tax Court · 1974
- Texasgulf, Inc. v. CommissionerUnited States Tax Court · 1996
- Northwestern Mut. Fire Asso. v. CommissionerUnited States Tax Court · 1949
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