PETROLEUM EXPLORATION
v.
BURNET, COMMISSIONER OF INTERNAL REVENUE
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An oil company sought to deduct depreciation allowances for capitalized drilling costs from its taxable income for tax years 1925-1927, but the Commissioner of Internal Revenue denied the deductions. The Supreme Court affirmed that the disputed costs were already covered by the statutory depletion allowance under the Revenue Act of 1926 and therefore could not be separately claimed as depreciation deductions.
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Mr. Justice Stone delivered the opinion of the Court.
Petitioner, a Maine corporation, in making its tax returns of income derived from the operation of oil wells in the years 1925, 1926, and 1927, claimed a deduction from gross income of a depreciation allowance on account of the capitalized costs of drilling the oil wells. The Commissioner refused to allow the deductions and assessed a corresponding deficiency against the taxpayer.
On appeal the Board of Tax Appeals held that the deductions should have been allowed. 23 B.
T. A.
890. On petition for review the Court of Appeals for the Fourth Circuit reversed the order of the Board. 61 F. (2d) 273. The court held that the deductions claimed were included in the depletion allowance fixed by § 234 (a) (8) of the Revenue Act of 1926 at 27%% of petitioner’s gross income for the years in question, and could not be allowed as deprecia^ tion of improvements. This Court granted certiorari to resolve a conflict of the decision below with that of the Court of Claims in Dakota-Montana Oil Co. v. United States, 59 F. (2d) 853. For reasons stated in United States v. Dakota-Montana Oil Co., decided this day, ante, p. 459, the Commissioner rightly refused to allow the deductions claimed and the judgment below is
Affirmed.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By (12 total)
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Ramsey v. Commissioner of Internal Revenue, 66 F.2d 316 (10th Cir. 1933)…2 B. T. A. 551, Id., 288 U. S. 508, 53 S. Ct. 439; Ziegler v. Commissioner, 23 B. T. A. 1091; P-M-K Petroleum Co. v. Commissioner, 24 B. T. A. 360; United States v. Dakota-Montana Oil Company, supra; Petroleum Exploration v. Burnet, Commissioner, 288 U. S. 467, 53 S. Ct. 439, 77 L. Ed. 898. In Robertson v. Commissioner, 28 B. T. A. — , the Board of Tax Appeals enforced this regulation at the instance of a taxpayer. While none of these cases hears directly upon the point, they have this significance: Thi…1 / 3
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Brountas v. Commissioner OF Internal Revenue, 692 F.2d 152 (1st Cir. 1982)…eing the date when the parties refused to pay further rents .... ” A. T. Jergins Trust v. Commissioner, 22 B. T.A. 551, 561-62 (1931), rev’d on other grounds, 61 F. 2d 92 (9th Cir. 1932), rev’d sub nom. Burnet v. A. T. Jergins Trust, 288 U.S. 508, 53 S.Ct. 439, 77 L.Ed. 925 (1933); see also Macon Oil & Gas Co. v. Commissioner, 23 B.T.A. 54 (1931); cf. Thor Power Tool Co. v. Commissioner, 439 U.S. 522, 545-46, 99 S.Ct. 773, 787-88, 58 L.Ed.2d 785 (1979) (disallowing a deduction for “excess” but not yet scr…
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Therrell v. Commissioner of Internal Revenue, 88 F.2d 869 (5th Cir. 1937)…y; where it is regarded as remote and indirect there is none. Illustrative cases discussing the principle and assembling the authorities are: Helvering v. Powers, 293 U.S. 214, 55 S.Ct. 171, 79 L.Ed. 291; Burnet v. A. T. Jergins Trust, 288 U.S. 508, 53 S.Ct. 439, 77 L.Ed. 925; Metcalf & Eddy v. Mitchell, Administratrix, 269 U.S. 514, 46 S.Ct. 172, 70 L.Ed. 384; Register v. Commissioner (C.C.A.) 69 F.(2d) 607, 93 A.L.R. 186; Fox Film Corporation v. Doyal, 286 U.S. 123, 52 S.Ct. 546, 76 L.Ed. 1010; Liggett &…
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Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Burnet v. Petroleum Exploration, 61 F.2d 273 (4th Cir. 1932)
- Dakota-Montana Oil Co. v. United States, 59 F.2d 853 (Ct. Cl. 1932)