Virginia B. Coal Co. v. Commissioner
United States Tax Court
During 1949 and 1950, petitioner contracted with independent contractors to strip mine coal from its property. For such strip mining, the contractors were to be paid a price which was dependent upon the amount which petitioner received from the sale of the coal.
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During 1949 and 1950, petitioner contracted with independent contractors to strip mine coal from its property. For such strip mining, the contractors were to be paid a price which was dependent upon the amount which petitioner received from the sale of the coal. Held, the independent contractors had an economic interest in the coal which they mined and petitioner must deduct the amounts paid to them from its gross income in computing its percentage depletion allowance under sections 23 (m) and 114 (b) of the 1939 Code.
1Opinion of the Court
OPINION.
Rice, Judge:
The sole issue is whether Swaney and Blythe possessed only an economic advantage in the coal which they mined or whether they possessed a real economic interest therein. If they possessed only an economic advantage from their strip mining, petitioner retained the full economic interest in all the coal which they mined. If, on the other hand, Swaney and Blythe possessed an economic interest, petitioner, in computing its percentage depletion allowance as provided by sections 23 (m) and 114 (b) (4) of the 1939 Code,1 must deduct the amounts paid to them from its gross income.…
2Cases cited4 opinions
- Morrisdale Coal Mining Co. v. CommissionerUnited States Tax Court · 1952
- Ruston v. CommissionerUnited States Tax Court · 1952
- Emil Usibelli and Rose P. Usibelli v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1955
- Weirton Ice & Coal Supply Co. v. CommissionerUnited States Tax Court · 1955
3Cited by14 opinions
- McCall v. CommissionerUnited States Tax Court · 1962
- Fink v. CommissionerUnited States Tax Court · 1958
- Parsons v. SmithCourt of Appeals for the Third Circuit · 1958
- McCall v. CommissionerUnited States Tax Court · 1956
- Denise Coal Co. v. CommissionerUnited States Tax Court · 1957
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