Problem -
Tiger energy has the following information:
Leasehold Costs - $6,000
Accumulated Depletion - 1,000
L&WE - 200,000
Accumulated depreciation - 75,000
The lease is subleased to Phil Oil Corporation for $300,000, and Tiger retains an 1/16 ORI. At the date of the sublease, the FMV of the equipment is 180,000.
REQUIRED: Determine the tax basis of Tiger's and Phil's assets and the amount of any tax revenue.