-2-
which stem from respondent’s disallowance of depletion deductions
claimed by an S corporation named Goodfellow Bros. Inc. (GBI):
1995 1996
James S. and Denise D. Goodfellow $69,594 $28,546
Daniel R. and Claudia Goodfellow 57,887 23,729
James B. and Nancy B. Goodfellow —0– 2,858
We decide herein whether GBI had the requisite economic
interest in certain unusable materials to deduct depletion under
section 611. We hold it did not. Unless otherwise indicated,
section references are to the Internal Revenue Code in effect for
the subject years. Rule references are to the Tax Court Rules of
Practice and Procedure.
FINDINGS OF FACT
All facts were stipulated. We incorporate herein by this
reference the parties’ stipulation of facts and the accompanying
exhibits. Petitioners resided in Wenatchee, Washington, when
their petition was filed.
James S. Goodfellow, Daniel R. Goodfellow, and James B.
Goodfellow (collectively, shareholders) own all of GBI’s stock.
Their respective ownership interests are 53.5 percent, 44.5
percent, and 2 percent. GBI’s primary business activity is
excavating and grading land. GBI works primarily as a general
contractor but works sometimes, including on all occasions
relevant herein, as a subcontractor.
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