Meredith Corporation & Subsidiaries - Page 10

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               Commissioner, 102 T.C. 406 (1994).  As a result of the                 
               opinion and as a result of the determination of the                    
               Commissioner, it has been determined that the deduction                
               * * * claimed as an amortization deduction with respect                
               to amounts allocated to a subscription list included in                
               the intangible assets acquired in the purchase of                      
               Ladies['] Home Journal, is disallowed in full because                  
               the amount paid was for non-amortizable intangibles,                   
               having an indeterminate useful life under Section 167                  
               of the Internal Revenue Code.                                          
               We agree with petitioner.  Among other things, respondent              
          misconstrues our holding in Meredith I regarding the contingent             
          nature of all of the editorial costs described above and the                
          resulting impact on petitioner's tax basis in the subscriber                
          relationships.  She also disregards general principles of tax law           
          concerning the treatment of contingent asset acquisition costs              
          incurred after an asset has been disposed of or has exceeded its            
          useful life.                                                                
          I. Meredith I Unequivocally Reasoned That Contingent Editorial              
          Costs Were To Be Added to the Tax Basis of the Subscriber                   
          Relationships When They Were Incurred                                       
               Respondent posits that the post-June 30, 1989, contingent              
          costs do not increase petitioner's basis in the amortizable                 
          subscriber relationships, but "instead are allocated to the basis           
          of going concern value or goodwill, neither of which is                     
          amortizable".  (The underlying transaction occurred prior to the            
          effective date of section 197, as enacted by Omnibus Budget                 
          Reconciliation Act of 1993, Pub. L. 103-66, section 13261(a), 107           
          Stat. 532.)                                                                 

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