Walsh v. Commissioner

Fifth Circuit

Walsh v. Commissioner

135 F.2d 701, 31 A.F.T.R. (P-H) 53, 1943 U.S. App. LEXIS 3356

CourtCourt of Appeals for the Fifth Circuit

DecidedMay 17, 1943

DocketNo. 10527

StatusPublished

This text of 135 F.2d 701 (Walsh v. Commissioner) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Walsh v. Commissioner, 135 F.2d 701, 31 A.F.T.R. (P-H) 53, 1943 U.S. App. LEXIS 3356 (5th Cir. 1943).

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McCORD, Circuit Judge.

The parties are different, but the issue here involved is identical with that presented and decided as to the Richter “B” Lease transaction in the recent case of Hardesty v. Commissioner, 5 Cir., 127 F.2d 843. The wells were drilled as consideration for the transfer of an interest in the lease, and the intangible drilling and development costs constitute a capital expenditure and may not be deducted as ordinary and necessary business expenses. See Commissioner v. Rowan Drilling Co., 5 Cir., 130 F.2d 62; United States v. Sentinel Oil Company, 109 F.2d 854, certiorari denied 310 U.S. 645, 60 S.Ct. 1095, 84 L.Ed. 1412.

On the authority of Hardesty v. Commissioner, supra, the decision of the Board is affirmed.

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McCORD, Circuit Judge.

The parties are different, but the issue here involved is identical with that presented and decided as to the Richter “B” Lease transaction in the recent case of Hardesty v. Commissioner, 5 Cir., 127 F.2d 843. The wells were drilled as consideration for the transfer of an interest in the lease, and the intangible drilling and development costs constitute a capital expenditure and may not be deducted as ordinary and necessary business expenses. See Commissioner v. Rowan Drilling Co., 5 Cir., 130 F.2d 62; United States v. Sentinel Oil Company, 109 F.2d 854, certiorari denied 310 U.S. 645, 60 S.Ct. 1095, 84 L.Ed. 1412.

On the authority of Hardesty v. Commissioner, supra, the decision of the Board is affirmed.

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135 F.2d 701, 31 A.F.T.R. (P-H) 53, 1943 U.S. App. LEXIS 3356, Counsel Stack Legal Research, https://law.counselstack.com/opinion/walsh-v-commissioner-ca5-1943.

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