Buffalo Eagle Mines, Inc. v. Commissioner
United States Board of Tax Appeals
Petitioner, having acquired a fully equipped and operating coal property in exchange for stock and an agreement to pay 10 cents a gross ton on all coal produced, paid $23,308.41 during the taxable period pursuant to its agreement.
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Petitioner, having acquired a fully equipped and operating coal property in exchange for stock and an agreement to pay 10 cents a gross ton on all coal produced, paid $23,308.41 during the taxable period pursuant to its agreement. Held, petitioner's payment, being an operating expense based on production, is deductible as royalty, or as an ordinary and necessary business expense within the meaning of section 23(a), Revenue Act of 1928; held, further, the contractual liability of petitioner was not a scheme devised to distribute corporate earnings under the guise of royalty payments.
1Opinion of the Court
BUFFALO EAGLE MINES, INC., PETITIONER v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
Buffalo Eagle Mines, Inc. v. Commissioner
Docket No. 70190.
United States Board of Tax Appeals
37 B.T.A. 843; 1938 BTA LEXIS 977;
May 13, 1938, Promulgated
Petitioner, having acquired a fully equipped and operating coal property in exchange for stock and an agreement to pay 10 cents a gross ton on all coal produced, paid $23,308.41 during the taxable period pursuant to its agreement. Held, petitioner's payment, being an operating expense based on production, is deductible as royalty, or as an ordinary and…
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