- 39 -
31 T.C. 1217, 1235 (1959) (“The amounts paid in 1951 and 1952 to
produce * * * [a sales catalog] were capital items contributing
to earning income for several years in the future and not
ordinary and necessary expenses of doing business in 1951 and
1952.”); Alabama Coca-Cola Bottling Co. v. Commissioner, T.C.
Memo. 1969-123 (costs of signs, clocks, and scoreboards, having a
useful life of 5 years not deductible business expense). But see
E.H. Sheldon & Co. v. Commissioner, 214 F.2d 655, 659 (6th Cir.
1954), (expenditures to produce sales catalog likely to be used
for several years deductible business expense) supra at 659.
D. Advertising Campaign Expenditures
Respondent would have us distinguish between the creation of
an advertising campaign and the execution of that campaign:
A marketing [advertising] campaign does not sell
anything. It prescribes a long-term intangible
marketing concept, its imagery, its theme, and its
slogan and/or message. That marketing concept is then
portrayed in advertisements with ever-changing art work
to maintain customer interest in the campaign. * * *
Respondent argues that advertising campaign expenditures are not
deductible business expenses because: “The cost of developing a
successful marketing campaign is expected to generate benefits
for future indefinite business operations.” To respondent,
advertising campaign expenditures are distinguishable from
advertising execution expenditures on the basis that the former
are solely long-term oriented, and that is a “decisive
difference” foreclosing an immediate deduction.
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