Meredith Corporation & Subsidiaries - Page 2

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               acquisition costs incurred in that year, after the                     
               underlying asset had been fully amortized.  Arrowsmith                 
               v. Commissioner, 344 U.S. 6 (1952) and sec. 1.338(b)-                  
               3T, Temporary Income Tax Regs., 51 Fed. Reg. 3592 (Jan.                
               29, 1986), applied.                                                    

               James L. Malone III, for petitioner.                                   
               Lawrence K. Letkewicz and Jan E. Lamartine, for respondent.            

               NIMS, Judge:  This matter is before the Court on                       
          petitioner's motion and respondent's cross-motion for partial               
          summary judgment filed pursuant to Rule 121 on July 26, 1996, and           
          November 8, 1996, respectively.  Petitioner moves for partial               
          summary judgment in its favor, arguing that it is entitled to               
          deduct contingent acquisition costs incurred after the asset to             
          which they pertain has been completely amortized.  Respondent               
          objects to petitioner's motion and also moves for partial summary           
          judgment in her favor, arguing in part that the expiration of the           
          useful life of the asset bars any further cost recovery by                  
          petitioner.  For the reasons detailed below, we shall grant                 
          petitioner's motion, and deny respondent's cross-motion for                 
          partial summary judgment.                                                   
               Unless otherwise indicated, all Rule references are to the             
          Tax Court Rules of Practice and Procedure.  All section                     
          references are to sections of the Internal Revenue Code in effect           
          as of the date of the initial transaction underlying the dispute.           

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