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import of this statement is that an intangible asset must have an
identifiable, separate, and distinct value apart from
nonamortizable goodwill or going-concern value to be amortizable
under section 1.167(a)-3, Income Tax Regs. Since the deposit
base cases involved asset acquisitions, mergers, or stock
acquisitions with a section 338 election,8 and the taxpayers’
positions in those cases were that they paid an allocable portion
of the overall purchase price for the value of the deposit base
of the target bank, this allocable portion represented their
“ascertainable cost basis” for amortization under section
167(g).9
In the instant cases, we are dealing with a unique
situation. Congress provided a specific adjusted basis for
8Sec. 338 allows an election in certain stock purchases by a
corporation. Under this election, the corporation whose stock
was acquired is treated: (1) As having sold all its assets at
the close of the acquisition date at fair market value in a
single transaction, and (2) as a new corporation which purchased
all those assets as of the beginning of the day after the
acquisition date. Sec. 338(a). Under sec. 338(b), the basis
allocated to the “acquired” assets is determined by reference to
the purchase price of the stock. First Chicago Corp. v.
Commissioner, T.C. Memo. 1994-300.
9Sec. 167(g) provides that “The basis on which exhaustion,
wear and tear, and obsolescence are to be allowed in respect of
any property shall be the adjusted basis provided in section 1011
for the purpose of determining the gain on the sale or other
disposition of such property.” Sec. 1011 generally provides an
adjusted cost basis for purposes of determining gain or loss.
See also secs. 1012 (cost basis), 1016 (adjustments); Fed. Home
Loan Mortgage Corp. v. Commissioner, 121 T.C. ___ (2003).
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