17 B.T.A. 580 | B.T.A. | 1929
Lead Opinion
The issues involved in this case are:
1. Deductibility of alleged losses in worthless interests in oil and gas royalty rights;
2. Deductibility of alleged worthless debts ascertained to be worthless and charged off in the taxable years.
With reference to the interests in oil and gas royalty rights, it may be pointed out that some of those claims, especially among the claims for 1922, are not clearly identified by the evidence. However, with reference to all of them, they were interests in royalty rights and not oil and gas leases.
Interests in royalty rights are interests running with the land, and unless specifically limited as to time or otherwise, are not. for-feitable. They may become unsalable, dormant for a time as it were, but still remain an asset, an asset of questionable value it may be, but nevertheless an asset, that may become valuable any day, and hence may not be deemed such an ascertained loss as to be deductible in determining net profits for taxation purposes.
The action of the Commissioner with reference to his disallowance of those claims is approved.
We believe that the evidence establishes the worthlessness of all those debts in the year in which deductions were taken,, and we therefore hold that for the year 1922, petitioner is entitled to deduct from gross income the following amounts:
Note and account of Robert Berney_'_ $600
Note of El Dorado Chief Oil Co_2, 200
Note of C. C. Beasley- 400
Also, there was included by the Commissioner in his computation of petitioner’s gross income, $2,175 as profits realized on sales. The evidence clearly establishes that of that amount $2,000 was not petitioner’s income, but income of his brother. The $175 amount was not explained by the evidence. In the final computation the $2,000 will be adjusted.
Judgment will be entered under Bule BO.