Brooks v. Commissioner
United States Tax Court
In two separate transactions, the petitioners and their associates purchased the working interests in oil and gas leases, subject to production payments. Their purpose was to operate the leases for profit, but, while the production payments were outstanding, each petitioner's share of the operating expenses exceeded his share of the income accruing to the working interest.
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In two separate transactions, the petitioners and their associates purchased the working interests in oil and gas leases, subject to production payments. Their purpose was to operate the leases for profit, but, while the production payments were outstanding, each petitioner's share of the operating expenses exceeded his share of the income accruing to the working interest. Held: 1. A portion of the operating expenses is attributable to the production of the oil accruing to the production payment, and such portion is not deductible but must be capitalized. For purposes of this case, such…
1Opinion of the Court
L. W. Brooks, Jr., and Jane R. Brooks, et al., 1 Petitioners v. Commissioner of Internal Revenue, Respondent
Brooks v. Commissioner
Docket Nos. 1957-65, 1958-65, 1879-66, 1880-66
United States Tax Court
50 T.C. 927; 1968 U.S. Tax Ct. LEXIS 58; 30 Oil & Gas Rep. 237;
September 26, 1968, Filed
Decisions will be entered under Rule 50.
In two separate transactions, the petitioners and their associates purchased the working interests in oil and gas leases, subject to production payments. Their purpose was to operate the leases for profit, but, while the production payments were outstanding, each…
Also in this document: Concurrence; Dissent.
2Cases cited14 opinions
- Deputy, Administratrix v. Du PontSupreme Court of the United States · 1940
- Burton-Sutton Oil Co. v. CommissionerSupreme Court of the United States · 1946
- Thomas v. PerkinsSupreme Court of the United States · 1937
- Doggett v. BurnetCourt of Appeals for the D.C. Circuit · 1933
- Great Northern Railway Co. v. CommissionerUnited States Board of Tax Appeals · 1927
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