Federal Home Loan Mortgage Corporation - Page 20

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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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