Halliburton
Halliburton v. Commissioner
Opinion
Lead Opinion
Norcross, J.
This is a petition for review of an order of the Board of Tax Appeals affirming a determination of the Commissioner that deficiencies exist in petitioners’ income tax returns for the year 1924, in the amount of $23,946.10 as to Erie P. Halliburton, and $21,649.89 as to his wife, Vida C. Halliburton. 25 B. T. A. 1045.
As the same facts apply to each taxpayer, it was stipulated that the causes be consolidated for hearing before the Board. The material facts are substantially as follows :
Petitioners were the equal owners of a partnership known as E. P. Halliburton Oil Well Cementing Company. The partnership was established about March 1, 1921, and until July 1, 1924, it profitably operated the business of cementing oil wells, using a patented process described and claimed in United States Letters Patent No. 1,369,891, which patent was granted to petitioner Erie P. Halliburton as of date March 1, 1921. The partnership also owned licenses to use two other patents, and owned equipment necessary to its business, as well as real estate and supplies.
On June 19, 1924, petitioners entered into an agreement with seven certain oil companies providing for the organization, under the laws…