Exxon Corp. v. Commissioner
United States Tax Court
Held: In computing allowance for percentage depletion, it is unreasonable to determine petitioners' 1979 "gross income from the property" for sales of natural gas after it was transported away from the wellhead by the method provided for in the last sentence of sec. 1.613-3(a), Income Tax Regs., the representative market or field prices, where those prices result in a "gross income from the property" that is approximately five times petitioners' actual contract sales revenue…
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Held: In computing allowance for percentage depletion, it is unreasonable to determine petitioners' 1979 "gross income from the property" for sales of natural gas after it was transported away from the wellhead by the method provided for in the last sentence of sec. 1.613-3(a), Income Tax Regs., the representative market or field prices, where those prices result in a "gross income from the property" that is approximately five times petitioners' actual contract sales revenue in connection with such sales; accordingly, in this case it is reasonable to use a net-back method. Respondent's motion…
1Opinion of the Court
Whitaker, Judge-.
This issue is before the Court on the parties’ timely motion and cross-motion for partial summary judgment pursuant to Rule 121.1 In support of respondent’s motion for partial summary judgment respondent contends that petitioners are not entitled to a percentage depletion deduction based upon a hypothetical “gross income from the property” that exceeds petitioners’ actual gross income from the sales of the gas at issue.2 Petitioners in support of petitioners’ cross-motion for partial summary judgment contend that, under the literal terms of section 1.613-3(a), Income Tax…
2Cases cited62 opinions
- United States v. American Trucking AssociationsSupreme Court of the United States · 1940
- Church of the Holy Trinity v. United StatesSupreme Court of the United States · 1892
- Public Citizen v. United States Department of JusticeSupreme Court of the United States · 1989
- Watt v. AlaskaSupreme Court of the United States · 1981
- United Steelworkers of America v. WeberSupreme Court of the United States · 1979
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- Exxon Mobil Corp. v. CommissionerUnited States Tax Court · 2000
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