Greensboro Gas Co. v. Commissioner
United States Board of Tax Appeals
1. Where petitioner is engaged in the business of producing natural gas from leased properties and selling the gas to consumers after transporting the same through its distribution system, consisting of gas mains, service pipes, compression stations, and meters, the total proceeds of sales do not constitute "the gross income from the property" for the purpose of computing an allowance for depletion under section 204(c)(2) of the Revenue Act of 1926, but such gross income is…
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1. Where petitioner is engaged in the business of producing natural gas from leased properties and selling the gas to consumers after transporting the same through its distribution system, consisting of gas mains, service pipes, compression stations, and meters, the total proceeds of sales do not constitute "the gross income from the property" for the purpose of computing an allowance for depletion under section 204(c)(2) of the Revenue Act of 1926, but such gross income is that portion of the total receipts which represents the fair market or field price of the gas at the wells prior to…
1Opinion of the Court
*1366OPINION.
Teammell :
The sole issue in this case is the amount of the deduction to which the petitioner is entitled on account of depletion of its natural gas properties, but in that connection two specific questions arise with respect to which the parties are in disagreement. The first *1367question is whether the gross income from the properties, within the meaning of section 204 (c) (2) of the Eevenue Act of 1926, is the total proceeds of sales of gas after transportation through petitioner’s distribution system of pipe lines, compression stations, and meters, or whether such gross income…
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