Merritt v. Commissioner
United States Tax Court
1. Petitioner Clyborne acquired leases on coal properties and assigned them to petitioner Paragon, of which he was controlling stockholder, for overriding royalties. Respondent disallowed all or a part of the overriding royalties as deduction to Paragon and taxed them as ordinary income to Clyborne.
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1. Petitioner Clyborne acquired leases on coal properties and assigned them to petitioner Paragon, of which he was controlling stockholder, for overriding royalties. Respondent disallowed all or a part of the overriding royalties as deduction to Paragon and taxed them as ordinary income to Clyborne. Held: 25 cents per ton of the 30-cent-per-ton royalty paid by Paragon to Clyborne was in fact a royalty, reasonable in amount, and is deductible by Paragon as an ordinary and necessary business expense, and the difference between 25 cents per ton and the royalties and overriding royalties paid by…
1Opinion of the Court
DeeNNEN, Judge:
In these consolidated proceedings respondent originally determined deficiencies in income tax and additions thereto due from petitioners as follows:
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In addition, by amendment to answer2 respondent has asserted claims for increased deficiencies, over and above those set forth above, in income tax as follows:
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Petitioner in Docket No. 90766 has made claim for overpayment for the taxable year ended September 30, 1955, in the amount of $6,307.24.
The issues remaining for decision in Docket No. 90766 are:(1) Whether Paragon Jewel Coal Company, Incorporated…
2Cases cited18 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- Palmer v. BenderSupreme Court of the United States · 1932
- Helvering v. Bankline Oil Co.Supreme Court of the United States · 1938
- Parsons v. SmithSupreme Court of the United States · 1959
- Sun Properties, Inc. v. United StatesCourt of Appeals for the Fifth Circuit · 1955
13 more not listed; retrieve them via the Exa API.
3Cited by20 opinions
- Paragon Jewel Coal Co. v. CommissionerSupreme Court of the United States · 1965
- Kansas City S. R. Co. v. CommissionerUnited States Tax Court · 1981
- R. T. French Co. v. CommissionerUnited States Tax Court · 1973
- Estate of Lucas v. CommissionerUnited States Tax Court · 1979
- Washburn v. CommissionerUnited States Tax Court · 1965
15 more not listed; retrieve them via the Exa API.