406 F2d 703 Laguna Royalty Company v. Commissioner of Internal Revenue

406 F.2d 703

69-1 USTC P 9206

LAGUNA ROYALTY COMPANY (Successor by merger to Lydia Oil
Company), Appellant,

No. 26291.

United States Court of Appeals Fifth Circuit.

Jan. 28, 1969, Rehearing Denied March 7, 1969.

Orrin W. Johnson, Johnson & Davis, Harlingen, Tex., Richard D. Davis, Harlingen, Tex., of counsel, for petitioner.

Mitchell Rogovin, Asst. Atty. Gen., Lee A. Jackson, Gilbert E. Andrews, Jr., Stanley I. Ruby, Attys., Dept. of Justice, Lester R. Uretz, Chief Counsel, I.R.S., Washington, D.C., for respondent.

Before TUTTLE and GEWIN, Circuit Judges, and PITTMAN, District Judge.


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The question presented by this appeal is whether the Tax Court correctly decided that, in the case of oil and gas producing properties, 'lifting costs,' which constitute a portion of the cost of producing oil and gas, are to be subtracted from gross sales in computing gross income for the purpose of determining whether personal holding company income, as defined in Section 543 of the Internal Revenue Code of 1954, is at least eighty percent of the corporation's total gross income for the taxable years.


We have carefully considered the unpublished memorandum findings of fact and opinion of the Tax Court and are fully in accord therewith. Based, therefore, on the findings and opinion of the Tax Court, dated February 28, 1968, we affirm the decision of the Tax Court.