Meredith Corporation & Subsidiaries - Page 9

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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-            
               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                  
               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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