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ending June 30, 1989 through 1992, and reduced its taxable income
for its taxable year ending June 30, 1993, from $67,529,801 to
$55,475,411 by using the remaining CDC preacquisition NOL
carryforwards.
On its consolidated return for the taxable year ended June
30, 1993, the Samson group used CDC's preacquisition ITC
carryforwards of $2,849,987.
Section 167 Depreciation
The rigs owned by CDC at the time of the Samson acquisition
had been substantially depreciated before the taxable year ending
June 30, 1987, and were fully depreciated before the taxable year
ending June 30, 1990. On its Federal income tax returns for 1987
through 1993, CDC claimed depreciation deductions under section
167 on 34 drilling rigs and related equipment acquired by CDC
after the Samson acquisition.
CDC acquired rig No. 40 in April 1987 and 33 additional rigs
beginning in May 1987. CDC acquired 15 drilling rigs in 1987, 17
in 1988, and 2 in 1989.
After the change of ownership, CDC did no drilling with
either the CDC rigs acquired before the Samson acquisition or
with the 34 rigs acquired after the Samson acquisition, with the
exception of rig No. 40, which was used to drill 14 wells from
1987 through 1989.
On August 31, 1988, Samson acquired 100 percent of Eason for
$6,654,000. Through the acquisition of Eason's stock, Samson
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