United States Board of Tax Appeals November 29, 1940, Docket Nos. 95744, 95745 (Ambrose v. Commissioner)

*1408OPINION.

TuRnee:

The petitioners contend that under Regulations 86, article 23 (m) — 16,1 they are entitled to deduct from gross income the intangible drilling and development costs of the four wells drilled in 1934. The respondent contends that the contracts under which the wells were drilled were “turnkey” contracts and that such costs should be capitalized.