Opinion
No. 81-1523.
December 3, 1982.
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.
Appeal from the United States Tax Court.
Before BARRETT, McKAY and LOGAN Circuit Judges.
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.