A. T. Jergins Trust v. Commissioner
United States Board of Tax Appeals
1. Petitioner's income from an oil and gas lease upon lands owned by a municipal corporation is not exempt from Federal income and profits taxes. 2. Evidence held insufficient to establish the worthlessness of an oil and gas lease where it appeared that petitioner continued to pay the rentals necessary to prevent forfeiture. 3. Expenditures for fuel, wages, repairs, hauling, etc., in connection with the drilling of oil and gas wells are capital expenses recoverable through…
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1. Petitioner's income from an oil and gas lease upon lands owned by a municipal corporation is not exempt from Federal income and profits taxes. 2. Evidence held insufficient to establish the worthlessness of an oil and gas lease where it appeared that petitioner continued to pay the rentals necessary to prevent forfeiture. 3. Expenditures for fuel, wages, repairs, hauling, etc., in connection with the drilling of oil and gas wells are capital expenses recoverable through depreciation rather than depletion.
1Opinion of the Court
*559OPINION.
Phillips :
The first and major question presented is whether so much of the income of petitioner as was derived from its oil and gas lease on lands owned by the city of Long Beach was exempt from Federal income and profits taxes. It is pertinent to point out that we do not have before us the issue whether the income of the city from the same lease is subject to such taxation. Petitioner vigorously contends that a tax upon its income from the lease constitutes a burden on the city’s right to lease and on the property itself, and is in fact a tax upon the municipality in violation of the…
2Cases cited2 opinions
- Metcalf & Eddy v. MitchellSupreme Court of the United States · 1926
- United States v. LudeySupreme Court of the United States · 1927
3Cited by11 opinions
- Brountas v. CommissionerUnited States Tax Court · 1979
- Simms Petroleum Co. v. CommissionerUnited States Board of Tax Appeals · 1933
- Miller v. CommissionerUnited States Board of Tax Appeals · 1933
- A. T. Jergins Trust v. CommissionerUnited States Board of Tax Appeals · 1931
- Brountas v. CommissionerUnited States Tax Court · 1979
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