REYNOLDS, COLLECTOR OF INTERNAL REVENUE,
v.
RICHARD F. COOPER
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The Supreme Court held that beneficiaries who received royalties from oil and gas leases were entitled to deduct depletion allowances on their tax returns, affirming lower court judgments that permitted such deductions on the full amounts of royalties received by the beneficiaries from trustees. The Court decided the case on authority of its contemporaneous decision in Helvering v. Falk, which established that depletion deductions could be claimed by beneficiaries rather than solely by the trust entities.
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Mr. Justice McReynolds delivered the opinion of the Court.
In each of these causes a beneficiary received from trustees royalties arising from a lease of oil and gas lands. in Wyoming. Taxes were exacted upon the full amounts so received. Separate suits were brought to recover proper allowances for depletion. The respondents prevailed in both of the courts below. Here the causes were heard together. The Solicitor General says — “ The question is identical with that raised in Helvering v. Falk, No. 225, October Term, 1933, and the argument made in the Government’s brief in that case is likewise applicable here. . . . There is therefore substantially no difference between the position of the beneficiaries in this case and the Falk case.”
The judgments below are affirmed upon authority of Helvering v. Falk, decided this day, ante, p. 183.
Affirmed.
Mr. Justice Brandeis, Mr. Justice Stone, and Mr. Justice Cardozo think that these cases are to be distinguished from No. 225, Helvering y. Falk, just decided, because of the nature of the duties imposed upon the trustees, and of the remainder interest granted to the beneficiaries by the trust instrument presently involved, and accordingly concur in the result.
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