Depreciation of customer-based intangibles confirmed by Supreme Court in Newark Morning Ledger

Tax Executive, The, May-June, 1993 by Mark B. Persellin

(17) Computing & Software, Inc. v. Commissioner, 64 T.C. 223 (1975), acq. 1976-2 C.B. 1.

(18) Los Angeles Central Animal Hospital, Inc. v. Commissioner, 68 T.C. 269 (1977).

(19) See, e.g., Sunset Fuel Co. v. United States, 519 F. 2d 781 (9th Cir. 1975) (valuation method for customer list was arbitrary and unrealistic).

(20)See, e.g., General Television, Inc. v. United States, 449 F. Supp. 609 (D. Minn. 1977), all'd, 598 F. 2d 1148 (8th Cir. 1979) (terminable-atwill subscriber list was customer structure which, in turn, was nondepreciable goodwill); AmSouth Bancorporation and Subsidiaries v. United States, 681 F. Supp. 698 (N.D. Ala. 1988) (bank core deposits akin to non-depreciable goodwill).

(21) Old I.R.C. (sectionb)(2). That provision was replaced by the rules set forth in I.R.C.

(22) 734 F. Supp. 176 (D.N.J. 1990).

(23) Id. at 180.

(24) 945 F. 2d 555 (3rd Cir. 1991).

(25) Id. at 565.

(26) Id. at 568.

(27) 61 U.S.L.W. 4313 (U.S. No. 91-1135) (April 20, 1993).

(28) Id. at 4320.

(29) Id.

(30) Id. at 4319 n.14.

(31) Id.

(32) See, e.g., INDOPCO, Inc. v. Commissioner, 112 S. Ct. 1039, 1043 (1992).

(33) See, e.g., H.R, 3545, 100th Cong., 1st. Sess. (section) 10120 (1987); and H.R. 563, 102d Cong., ist Sess. (1991).

(34) H.R. 4210, 102d Cong., 2d Sess. (section) 4501 (1992).

(35) H.R. 13, 103d Cong., ist Sess. (1993).

MARK B. PERSELLIN is an Assistant Professor of Accounting in the School of Business and Administration at St. Marls University in San Antonio, Texas. He holds a Ph.D. from the University of Houston and is a certified public accountant. Mr. Persellin is a member of the Tax Division of the AICPA and the American Taxation Association. He lectures and writes on varied tax topics; his article on the deductibility of takeover expenses appeared in the May-June 1990 issue of The Tax Executive.