Skip to main content
U.S. Department of Energy
Office of Scientific and Technical Information

Revenue Ruling 83-46: draining the pool-of-capital doctrine

Journal Article · · J. Energy Law Policy; (United States)
OSTI ID:5973777
After outlining the development of the pool-of-capital doctrine since its introduction in 1933. The author analyzes Revenue Ruling 83-46, its effects on the oil and gas industry, and possible ways to avoid its consequences when it ignored the pool-of-capital doctrine and held that the fair market value of the royalty interests must be included in gross income at the time the interest was received. The Internal Revenue Service ignored applicable law that has consistently made the pool-of-capital doctrine an exception to general income recognition rules. The Ruling clouds the future of the doctrine and the applicability of the case law clarifying it to date. The IRS needs to either overrule prior decisions upholding the doctrine, issue another ruling correcting and clarifying the doctrine, or let practitioners know how similar capital investments in oil and gas properties will be treated in the future.
OSTI ID:
5973777
Journal Information:
J. Energy Law Policy; (United States), Journal Name: J. Energy Law Policy; (United States) Vol. 6:1; ISSN JELPE
Country of Publication:
United States
Language:
English