Higgins v. Commissioner , 33 T.C. 161 ( 1959 )

Winifred E. Higgins, Petitioner, v. Commissioner of Internal Revenue, Respondent

Higgins v. Commissioner

Docket Nos. 72237, 72238

United States Tax Court

33 T.C. 161; 1959 U.S. Tax Ct. LEXIS 52;

October 27, 1959, Filed

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Decisions will be entered under Rule 50.

Petitioner is one of the owners of an iron ore mine which was leased in the years in question to the United States Steel Corporation. The rent or royalty fixed in the lease was a cash sum plus payment by United States Steel of the ad valorem real estate tax. Held, that the ad valorem real estate tax paid by United States Steel on the mine in question is includible in petitioner's gross income as additional rent or royalty and she is entitled to percentage depletion on the amounts so paid. Burt v. United States, 145 Ct. Cl. 282, 170 F. Supp. 953 (Ct. Cl., 1959), followed.

John W. Hughes, Esq., John E. Hughes, Esq., and Harold R. Burnstein, Esq., for the petitioner.

William H. Welch, Esq., for the respondent.

Fisher, Judge.

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FISHER

OPINION.

The above-entitled cases were consolidated. They involve deficiencies in income tax determined against petitioner for the years and in the amounts following:

Year	Deficiency
1953	$ 1,527.11
1954	2,271.28
1955	2,428.99
1956	1,928.56
Total	8,155.94

The only issue presented is whether ad valorem real estate taxes paid by lessee, United States Steel Corporation, on an iron ore mine are includible in lessor's gross income for such years as additional rent or royalty and thus part of lessor's gross income from the property.

All of the facts are stipulated and are included herein by this reference.

Both parties agree that Burt v. United States, 145 Ct. Cl. 282, 170 F. Supp. 953 (Ct. Cl., 1959), decided adversely to the United States, is "on all fours" with the instant case. Respondent would have us hold that the Court of Claims was in error. We have carefully reviewed Burt v. United States, supra, in the light of the arguments presented by respondent in the instant case. We agree with the reasoning of the Court of Claims in the Burt case, as well as the conclusion reached by that court. We, accordingly, sustain petitioner's position in the instant case.

Decisions will be entered under Rule 50.