United States Supreme Court Cases & Opinions

U.S. Supreme Court

Reinecke v. Spalding, 280 U.S. 227 (1930)

Reinecke v. Spalding

No. 59

Argued December 6, 1929

Decided January 6, 1930

280 U.S. 227

Syllabus

1. One who seeks to recover money exacted as income taxes upon the ground that a deduction as claimed was illegally disallowed by the Commissioner of Internal Revenue has the burden of showing that he was entitled to such deduction. P. 280 U. S. 232.

2. Under § 214(a) of the Revenue Act of 1918, and likewise (semble) under § 5(a) of the Revenue Act of 1916, the deduction for depletion in computing the net income derived during a tax year from a mine, by its lessor, under a long lease made prior to March 1, 1913, reserving a fixed royalty per ton of ore extracted by the lessee, is to be determined on the basis of the fair market value

Page 280 U. S. 228

on that date of the lessor's interest in the mine as an entity -- i.e., of his right to receive the royalties stipulated and to regain possession when the lease should terminate. P. 280 U. S. 233.

3. The market value per ton on March 1, 1913, is not equivalent to the sum which, with simple interest from that date, will equal the royalty when the ore is actually extracted and the royalty is payable. P. 280 U. S. 233.

30 F.2d 369 reversed.

Certiorari, 279 U.S. 831, to review a judgment of the circuit court of appeals which affirmed a recovery in an action against the Collector for money paid under protest as income taxes.