Yates v. Commissioner
United States Tax Court
In a Federal oil and gas lottery, petitioners were awarded three oil and gas leases on properties in Wyoming and North Dakota. The properties were not within any known geologic structure of producing oil or gas fields. Petitioners transferred their interests in the leases in consideration of cash payments, retaining various percentages of future oil or gas production.
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In a Federal oil and gas lottery, petitioners were awarded three oil and gas leases on properties in Wyoming and North Dakota. The properties were not within any known geologic structure of producing oil or gas fields. Petitioners transferred their interests in the leases in consideration of cash payments, retaining various percentages of future oil or gas production. Petitioners' retained interests in the leases would terminate at "such time as the then estimated recoverable reserves * * * are 10 percent or less." Held, petitioners have not proven that the expected economic lives of their…
1Opinion of the Court
Cohen, Judge:
Respondent determined deficiencies of $131,475 and $52,497 in petitioners’ Federal income tax for 1981 and 1982, respectively. The sole issue for decision is whether cash payments received by petitioners in 1981 and 1982 for the transfer of interests in oil and gas leases should be treated as ordinary income subject to depletion or as long-term capital gains.
Unless otherwise indicated, all Rule references are to the Tax Court Rules of Practice and Procedure, and all section references are to the Internal Revenue Code, as amended and in effect for the years in issue.
FINDINGS OF…
2Cases cited10 opinions
- Burnet v. HarmelSupreme Court of the United States · 1932
- Commissioner v. P. G. Lake, Inc.Supreme Court of the United States · 1958
- Anderson v. HelveringSupreme Court of the United States · 1940
- Brountas v. CommissionerUnited States Tax Court · 1979
- Paul P. Brountas v. Commissioner of Internal Revenue, Paul P. And Lynn T. Brountas v. Commissioner of Internal RevenueCourt of Appeals for the First Circuit · 1982
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3Cited by2 opinions
- Richard M. And Brenda R. Yates v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1991
- Yates v. CommissionerUnited States Tax Court · 1989