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add such amounts to the basis in the years in which they were
incurred. Meredith Corp. & Subs. v. Commissioner, supra at 454-
455.
Petitioner claims that respondent erred in disallowing the
ordinary amortization deduction of $1,555,428 in its TYE 1990,
inasmuch as the deduction reflects the portion of the LHJ
purchase price and corresponding tax savings attributable to the
acquired subscriber relationships for that year. Since the 42-
month useful life of the subscriber relationships had expired,
Meredith argues that the entire additional purchase price
becoming fixed during its TYE 1990 should be deducted in that
year in order for it to adequately recover the cost of its
investment.
Respondent contends, on the other hand, that Meredith's
annual recovery of the total cost of the subscriber relationships
must be terminated. Thus, respondent argues that petitioner is
not permitted to deduct $1,555,428 in its TYE 1990 and that at
least $807,267 (actual editorial costs exclusive of tax benefits)
represents a nonamortizable capital expenditure. She proposes
June 30, 1989, as the cut-off date for petitioner's recovery of
costs, even though not all of the costs of the subscriber
relationships had been incurred as of that date. Respondent
states in the notice of deficiency:
The court determined that the subscriber
relationships acquired on January 3, 1986 had a useful
life of 42 months in Meredith Corp. and Subs. v.
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