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amortization denied in absence of proof of limited life), affg.
65 T.C. 480 (1975).
Although the case law admits the possibility of allocation
between the short- and long-term benefits of advertising
expenditures and, thus, would provide a basis for the
Commissioner to insist that a taxpayer prove the portion of his
advertising expenditures allocable to current benefits, the
authorities previously cited, section 1.162-20(a)(2), Income Tax
Regs., and Rev. Rul. 92-80, supra, establish that the Secretary
and the Commissioner, respectively, have eschewed that approach
with respect to ordinary business advertising, even if long-term
benefits (e.g., goodwill) are the taxpayer’s primary objective.
See also Rev. Rul. 68-561, 1968-2 C.B. 117 (concerning a gas
company’s campaign to increase consumption by encouraging the
construction of “all gas” homes and the conversion of existing
homes to gas and distinguishing between cash allowances to
builders and homeowners, which must be capitalized because the
expected benefit is increased sales of gas beyond the year of
expenditure, and direct advertising costs of the sales campaign,
which may be treated as ordinary business expenses because “less
directly and significantly productive of intangible assets having
a value extending beyond the taxable years in which they were
paid or incurred”).
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