Transco Exploration Company v. Commissioner of Internal Revenue

PATRICK E. HIGGINBOTHAM, Circuit Judge:

This vestigial case involves the net income limitation on windfall profit under § 4988 of the Internal Revenue Code, 26 U.S.C. § 4988, 2 since repealed. The Commissioner appeals the Tax Court’s decision that a taxpayer computing this limitation is entitled both to exclude lease bonus payments in calculating taxable income from the property and to include these same payments in its basis for the cost depletion deduction from taxable income. We affirm.

I

Appellee Transco Exploration Co. is an oil and gas exploration and production company that leased…