Ridley v. Commissioner
United States Tax Court
Petitioners granted Monsanto the right to mine phosphate from a deposit that promised to yield 116,000 tons in consideration of an advance royalty payment of $ 20,000 payable, whether or not any ore was removed, in 3 fixed annual installments plus 40 cents per ton for each additional ton removed over 50,000. Held, petitioners retained an economic interest in the phosphate, and the contract constitutes a mineral lease and not a sale of a capital asset.
1Opinion of the Court
Tietjens, Judge:
The Commissioner determined deficiencies in the income tax liability of petitioners for the taxable years 1967 and 1968 as follows:
Tear Deflcienev
1967 _:_$353.46
1968 _'_ 513. 00
The sole issue for our determination is whether payments received by petitioners under a contract to mine and remove phosphate from their land should be treated as gain from the sale of a capital asset or as ordinary income sub j ect to depletion.
FINDINGS OF FACT
The parties have stipulated certain facts which, together with the attached exhibits, are incorporated herein by this reference.
Campbell P.…
2Cases cited6 opinions
- Palmer v. BenderSupreme Court of the United States · 1932
- Nathaniel C. Wood and Gertrude L. Wood v. United StatesCourt of Appeals for the Fifth Circuit · 1967
- Louis Rabiner and Lena Rabiner, Husband and Wife v. Ernest W. Bacon, Director of Internal RevenueCourt of Appeals for the Eighth Circuit · 1967
- Day v. CommissionerUnited States Tax Court · 1970
- Rose v. CommissionerUnited States Tax Court · 1971
1 more not listed; retrieve them via the Exa API.
3Cited by5 opinions
- Gammill v. CommissionerUnited States Tax Court · 1974
- O'Connor v. CommissionerUnited States Tax Court · 1982
- Gammill v. CommissionerUnited States Tax Court · 1974
- O'Connor v. CommissionerUnited States Tax Court · 1982
- Ridley v. CommissionerUnited States Tax Court · 1972