Chaparral Oil Co. v. Commissioner
United States Board of Tax Appeals
LOSS DEDUCTION - OIL AND GAS ROYALTY - RETENTION OF TITLE AND SUBSEQUENT RECOUPMENT. - In 1932 petitioner purchased an oil and gas royalty interest in certain land situated in Kansas. In 1935 new developments established that the land was structurally below the water line of the adjacent field, and thus excluded from commercial production.
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LOSS DEDUCTION - OIL AND GAS ROYALTY - RETENTION OF TITLE AND SUBSEQUENT RECOUPMENT. - In 1932 petitioner purchased an oil and gas royalty interest in certain land situated in Kansas. In 1935 new developments established that the land was structurally below the water line of the adjacent field, and thus excluded from commercial production. On advice of its consulting geologist, petitioner charged off its investment during the taxable year 1935, and claimed the amount as a deduction from gross income, although it retained title to its royalty interest. In 1936 petitioner received $600 rental…
1Opinion of the Court
*459OPINION.
Hill:
Petitioner offered the testimony (by deposition or in person) of five witnesses, all of whom were graduate geologists of long practical experience and were members of the American Association of Petroleum Geologists and the Tulsa Geological Society. Some were also members of other technical organizations. One of these witnesses was a geologist for petitioner, who examined the royalty interest in 1935 and accumulated the data made available by the wells which had been drilled at that time in and around the oil producing area including wells on every side of the leased land and…
2Cases cited2 opinions
- Lucas v. American Code Co.Supreme Court of the United States · 1930
- United States v. S. S. White Dental Manufacturing Co.Supreme Court of the United States · 1927
3Cited by5 opinions
- Louisiana Land & Exp. Co. v. Commissioner of Int. Rev.Court of Appeals for the Fifth Circuit · 1947
- Malcolm J. Henley and Mary K. Henley v. The United StatesUnited States Court of Claims · 1968
- James Petroleum Corporation v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1956
- Chaparral Oil Co. v. CommissionerUnited States Board of Tax Appeals · 1941
- Finston v. CommissionerUnited States Tax Court · 1956