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Memo. 1994-300; Trustmark Corp. v. Commissioner, T.C. Memo. 1994-
184; Peoples Bancorporation v. Commissioner, supra; Colo. Natl.
Bankshares, Inc. v. Commissioner, supra. In doing so, this Court
and the Courts of Appeals have rejected the Commissioner’s
argument that deposit base is not amortizable as a matter of
law.7
We believe the cases involving core deposits support
petitioner’s position that favorable financing is an intangible
asset subject to amortization. Petitioner’s favorable financing
is in many respects similar to the core deposits considered in
the above cases. Like the core deposits in those cases,
favorable financing involves the use of borrowed money at below-
market rates. Like core deposits, below-market financing
arrangements provide a less expensive means of generating income
and contribute to the profitability of a business.
Respondent claims that the cases involving core deposits are
distinguishable because “The core deposits at issue were
customer-based intangibles representing stable deposits that
7We also point out that the U.S. Supreme Court discussed our
holding in Citizens & S. Corp. v. Commissioner, 91 T.C. 463
(1988), affd. 919 F.2d 1492 (11th Cir. 1990), favorably in its
opinion in Newark Morning Ledger Co. v. United States, 507 U.S.
546, 561-562 (1993). See Trustmark Corp. v. Commissioner, T.C.
Memo. 1994-184 (“the Supreme Court has cited Citizens & Southern
Corp. with approval and has rejected respondent’s underlying
legal argument that as a matter of law core deposits * * * are
inseparable from goodwill/going concern value and thus
nondepreciable”).
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