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contention is that we are without jurisdiction to consider their
requests.
We now turn to an analysis of the issue as to whether
petitioners are entitled to a depletion allowance in excess of 15
percent of their gross royalty income.
As we see it, there are two prongs to petitioners' position.
First, they contend that, as owners of the land, they are
entitled to the entire percentage depletion allowance given that
Shell as an integrated oil producer is not entitled to such an
allowance. Second, they contend that their percentage depletion
allowance should be calculated on the basis of the "market
price"4 as provided in section 1.613-3(a), Income Tax Regs. For
reasons hereinafter set forth, we reject both contentions.
Section 611(a) provides for a reasonable allowance for
depletion in the case of oil wells. Section 611(b) provides that
"In the case of a lease, the deduction under this section shall
be equitably apportioned between the lessor and lessee." With
exceptions not applicable to petitioners, the depletion allowance
for oil wells is, with respect to a limited quantity of the
taxpayer's average daily production of oil, 15 percent "of the
gross income from the property excluding from such gross income
4 Petitioners set forth in their briefs extensive data
related to this calculation. Such data, however, is not evidence
and, therefore, in any event would not be considered. Rule
143(b); see also supra pp.6-7.
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