9
sales manager, petitioner believed the typical turnover rate to
be 5 to 10 years. Petitioner determined the useful life of the
customer lists she had acquired in 1988 by determining how many
customers contained thereon remained active as of the end of
1992. She found that 85 to 95 percent of the customers were no
longer purchasing from her at that time, and, from this, she
estimated the useful life of the bases to be 7 years.
Petitioner acted as a Safeguard distributor from February 1,
1988, and throughout the years in issue, carrying on this
business under the name of Prestonwood Business Forms. Other
than the salary which petitioner received from Safeguard for the
month of January 1988, petitioner's only other source of gross
income was derived from rental real estate property that she
operated at a loss during the taxable years in issue. At the
time of trial, petitioner continued to be engaged in business as
a Safeguard distributor.
Petitioner claimed deductions for amortization related to
the customer lists based on a cost basis of $588,020 and a useful
life of 7 years. Petitioner filed her income tax returns for the
taxable years 1988, 1989, 1990, and 1991 in 1993. On Schedule C,
Profit or Loss from Business or Profession, of her Federal income
tax return filed for the taxable year 1988, petitioner claimed
amortization deductions in the amount of $77,003. Petitioner
claimed amortization deductions in the amount of $84,003 on
Schedule C of her return filed for 1989. Petitioner seeks
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