- 24 -                                         
                                       SPC-SC                                         
               Termite contracts:                                                     
               Corrected amortizable basis             $334,406                       
               Less:  previously allowed amortization   (108,031)                     
               Adjusted basis                          226,375                        
               Divided by remaining useful life         11.417                        
               Allowed amortization deduction           19,828                        
               Pest control contracts:                                                
               Corrected amortizable basis             $660,136                       
               Less:  previously allowed amortization   (324,092)                     
               Adjusted basis                          336,044                        
               Divided by remaining useful life            6.417                      
               Allowed amortization deduction           52,368                        
                                       SPC-FL                                         
               Termite contracts:                                                     
               Corrected amortizable basis             $112,250                       
               Less:  previously allowed amortization     (3,668)                     
               Adjusted basis                          108,582                        
               Divided by remaining useful life         14.58                         
               Allowed amortization deduction            7,447                        
               Pest control contracts:                                                
               Corrected amortizable basis             $824,415                       
               Less:  previously allowed amortization   (125,576)                     
               Adjusted basis                          698,839                        
               Divided by remaining useful life         9.58                          
               Allowed amortization deduction           72,948                        
                                       OPINION                                        
               In the notice of deficiency, respondent determined that the            
          Spencers were not entitled to take into account in determining              
          their taxable income for taxable years 1990, 1991, and 1992, Mr.            
          Spencer's pro rata share of ordinary loss from SPC-SC for such              
          years because Mr. Spencer's claimed losses exceeded his basis in            
          his stock in SPC-SC and indebtedness owed to him by SPC-SC.                 
          Respondent also determined that the Spencers were not entitled to           
Page:  Previous   14   15   16   17   18   19   20   21   22   23   24   25   26   27   28   29   30   31   32   33   NextLast modified: May 25, 2011