Roger Muldavin, et al. - Page 10

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               It is equally clear the gross income used is the amount                
          actually or constructively received by the taxpayer.  Helvering             
          v. Mountain Producers Corp., supra.  Thus, petitioners cannot               
          claim depletion on another interest holder's gross income from              
          the property, whether or not such taxpayer is entitled to a                 
          depletion allowance.  The fact that Shell may be a major                    
          integrated oil producer precluded from using percentage                     
          depletion, see Exxon Corp. v. Commissioner, 102 T.C. 721 (1994),            
          is beside the point, particularly since Shell is still entitled             
          to a depletion allowance based on the cost method.  Secs. 611 and           
               In a similar vein, petitioners' arguments based upon the use           
          of "market price" and its relationship to "controlled price" are            
          also irrelevant, particularly in light of petitioners' efforts to           
          reconstruct the price movements going back to 1980.  Insofar as a           
          "controlled price" is concerned, that phrase has no bearing in              
          the years before us since Federal oil price controls were lifted            
          in 1981.  See CanadianOxy Offshore Prod. Co. v. Commissioner, 100           
          T.C. 382, 384, 387 (1993).  With respect to "market price", we              
          see no basis for applying such a standard herein.  That standard,           
          referred to as "representative market or field price",                      
          section 1.613-3(a), Income Tax Regs., applies to taxpayers,                 
          generally integrated producers, who do not sell their oil or gas            
          in the immediate vicinity of the well and who thus must calculate           

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