Meredith Corporation & Subsidiaries - Page 7

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          had reviewed and "taken no exception" to the settlement reached             
          by the parties for Meredith's TYE 1989.                                     
               Meredith timely filed a Federal income tax return for its              
          TYE 1990 prior to the Court's decision in Meredith I.  Based on             
          Meredith I, petitioner later claimed an ordinary deduction for              
          that year of $1,555,428 ($807,267 editorial costs plus tax                  
          savings) relating to the acquisition of the subscriber                      
          relationships.  On August 29, 1995, respondent issued a statutory           
          notice of deficiency to Meredith in which, among other                      
          adjustments to income, Meredith's claimed deduction of $1,555,428           
          for its TYE 1990 was disallowed completely, and a deficiency of             
          $744,852 was determined.                                                    
               We must adjudge the proper tax treatment for contingent                
          editorial costs and correlated tax savings that were allocable to           
          the basis of the subscriber relationships in Meredith's TYE 1990.           
          The issue of whether these costs should be allocated to the basis           
          of that particular asset was resolved affirmatively in Meredith             
          I.  Meredith Corp. & Subs. v. Commissioner, 102 T.C. at 455.                
          However, the subscriber relationships were completely amortized             
          after the end of their stipulated 42-month useful life.                     
               In Meredith I, this Court established a methodology for                
          determining Meredith's tax basis in its subscriber relationships.           
          Critical to this method--and the current imbroglio--was our                 

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