GATES RUBBER CO. v. COMM. OF INTER. REVENUE

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Docket Number

No. 81-1523.

Attorney(S)

George L. Hastings, Jr., Tax Div., Dept. of Justice, Washington, D.C. (with John F. Murray, Acting Asst. Atty. Gen., Michael L. Paup and Gary R. Allen, Tax Div., Dept. of Justice, Washington, D.C., on the brief), for appellant. Buford P. Berry, Dallas, Tex. (with J.W. Bullion and Emily A. Parker, Dallas, Tex., on the brief), of Thompson Knight, Dallas, Tex., for appellee.

Judges

James Emmett Barrett
Monroe G. McKay
James Kenneth Logan

Acts

Internal Revenue Code — Income Taxes — Normal Taxes And Surtaxes — Computation Of Taxable Income — Items Not Deductible — Capital Expenditures

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Cites

Citation Codes

Equivalent Citations

citation codes

Docket Number

No. 81-1523.

Attorney(S)

George L. Hastings, Jr., Tax Div., Dept. of Justice, Washington, D.C. (with John F. Murray, Acting Asst. Atty. Gen., Michael L. Paup and Gary R. Allen, Tax Div., Dept. of Justice, Washington, D.C., on the brief), for appellant. Buford P. Berry, Dallas, Tex. (with J.W. Bullion and Emily A. Parker, Dallas, Tex., on the brief), of Thompson Knight, Dallas, Tex., for appellee.

Judges

James Emmett Barrett
Monroe G. McKay
James Kenneth Logan

Acts

Internal Revenue Code — Income Taxes — Normal Taxes And Surtaxes — Computation Of Taxable Income — Items Not Deductible — Capital Expenditures

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GATES RUBBER COMPANY, AND SUBSIDIARIES, APPELLEE, v. COMMISSIONER OF INTERNAL REVENUE, APPELLANT.

PER CURIAM.

In this appeal we are asked to decide whether the costs of drilling offshore exploratory oil and gas wells from mobile rigs are deductible in the year in which they are incurred as "intangible drilling and development costs" under 26 U.S.C. § 263(c) and Treas. Reg. § 1.612-4(a) ("the IDC option"). The Tax Court, 74 T.C. 1456, ruled in favor of the taxpayer and against the Commissioner.

All parties agree that the issue in this case is identical with the prior consideration of this issue by the Third Circuit in Sun Co. v. Commissioner, 677 F.2d 294 (3rd Cir. 1982). The Third Circuit held for the tax-payer. We agree with the Third Circuit.

AFFIRMED.

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GATES RUBBER COMPANY, AND SUBSIDIARIES, APPELLEE, v. COMMISSIONER OF INTERNAL REVENUE, APPELLANT.

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