The Morning Tulsa daily world. [volume] (Tulsa, Okla.) 1919-1927, 1921-01-05
Not Many Changes in Income
Tax Regulation

Samuel j. Caudill. who came 10
Tulsa direct from Washington. where
he was taking an important part In
The work Of the Interior department
in regard to taxation matters. has
kindly made the following summary
OF the new regulations. They are
interesting only TO the oil producers
and their attorneys who VIII be glad
o know how 1t looks from experts
point of view.
Tulsa Daily World.
In compliance with your request
have read Treasury decision 3107,
relative to depletion and depreciation
deductions and give you herewith my
comments thereon.
The decision states that the fol-
lowing articles. found in regulations
i5 have been amended; 2Ol, 203. 2Ot.
I205, zoe, 2O7, 2OS. 210. 2l5, 2l5,
I217, 2ls. 2l9, 222, and 224.
! am glad to state that there are
no serious changes In the above ar
ticles as they apply to the taxation
Of oil and gas properties. The deci-
sion primarily affects the present
methods OF mine taxation and suE-
gests remedial measures pertaining
thereto.
Anyone accustomed to regulations
45 as 1t now exists will have no diff
ficulty In making out income tax re-
Turns In accordance with the articles
Iamcnded by the above decision, The
Ichanges are insignificant and should
/ not cause any alarm whatever TO the
oil fraternity. The working condi-
tons under this decision are sub
Istantially the same an those OF tho
| old regulations under article 201 a
few terms and definitions have been
inserted which are given herewith.
ta) Basic Date--The term basic
date" indicates the valuation, l.
March /. 1913, In the case OF prop
erty acquired prior thereto, the date
of acquisition in the case of prop
erty acquired on or after March I.
1913, or the date OF discovery or
within thirty days thereafter in the
case OF discovery.
| (b) The fair market value" of a
market price of Gulf Pipe Line
| Company OF Oklahoma on the date
such option to purchase may be
| exercised by said company, with the
| understanding and agreement that
property Is that amount which would
induce a willing seller to sell and a
| willing buyer to purchase. Where
there has been no sale and the fair
market value at the basic date is TO
be used, such value will be deter
mined by the method which pro-
IspeCtive vendor and vendee in the
industry would use IN arriving at the
sale value Of the property at the
basic date.
| (c) A mineral property or
l"property" IS the oil or gas well, In
IcludIng the mineral plant, develop
ment, and surfaC. value Of the land.
THE value of a mineral property Is
the combined value OF its component
parts,
(d) 4 mineral deposit refers TO
mineral only such az the "ores
only" in the case Of a mine 10 the
"oli only" In the case OF an OIL wei.
and to the gas only, in the case OF
| n gas well. The value Of mineral
ldeposit is its cost: or II Is the value
Of the mineral property, less the
value OF the plant, equipment and
lsurface of the land for purposes
iother than mineral production.
| ID Operating profit" Il the net
Income from mineral production be-
fore depletion and depreciation are
deducted. 1t Is distinct from net in
come.
The new decision does not affect
larticles 2ls, eco. 22oa and 22l, TIL
former article applies TO the deple'
,ion of oil and gas properties
lwhereas the later three deal with