United States Supreme Court Cases & Opinions

U.S. Supreme Court

Douglas v. Commissioner, 322 U.S. 275 (1944)

Douglas v. Commissioner of Internal Revenue

Nos. 130 and 131

Argued March 7, 1944

Decided May 15, 1944

322 U.S. 275

Syllabus

1. Article 23 (m)-10(c) of Treasury Regulations 94, which, in the case of a lease of an iron ore mine terminated in 1937 without any ore having been extracted during the existence of the lease, requires that depletion deductions taken in prior years on receipt of advance royalties be restored to the lessor's capital account and that a corresponding amount be returned as income for the year in which the lease was terminated, held valid as authorized by and consistent with § 23 (m) of the Revenue Act of 1936, and not inconsistent with §§ 113(b)(1)(B) and 114(b)(1) or §§ 41 and 42 of the Act. P. 322 U. S. 280.

2. A judgment of the Circuit Court of Appeals reversing a decision of the Board of Tax Appeals which refused to treat as income of the taxpayer for the year in which the lease was terminated the amount of a depletion deduction which, in the year taken and allowed, resulted in no tax benefit, affirmed here by an equally divided court. P. 322 U. S. 287.

134 F.2d 762 affirmed.

Certiorari, 320 U.S. 734, to review a Judgment which affirmed in part and reversed in part a decision of the Board of Tax Appeals upon review of determinations of deficiencies in income tax.

Page 322 U. S. 276