- 21 -
petitioner for purposes of determining its gain on the sale or
other disposition of property held on January 1, 1985. See DEFRA
sec. 177(d)(2)(A)(ii). In Fed. Home Loan Mortgage Corp. v.
Commissioner, 121 T.C. ___ (2003), we held that since section
167(g) requires the use of the basis for determining gain as the
basis for amortization of intangible assets and since DEFRA
section 177(d)(2)(A)(ii), 98 Stat. 711, replaced the regular
adjusted cost basis rule of section 1011 for purposes of
determining gain, petitioner’s basis for amortizing any
intangibles it held on January 1, 1985, is the higher of the
regular adjusted cost basis or fair market value of petitioner’s
intangible assets as of that date. Given this special
circumstance, we do not find the cases involving core deposits
distinguishable for the reason that respondent claims. It
follows from our previous Opinion regarding the application of
DEFRA section 177(d)(2)(A)(ii) that petitioner’s failure to
establish a “cost basis” does not prevent it from claiming a
higher fair market value basis in its favorable financing. Thus,
we do not believe an acquisition or an allocable cost is
essential to petitioner’s claim that it held an asset of value in
the form of its favorable financing as of January 1, 1985.10
10Further, although relevant to the general question whether
a taxpayer has an adjusted cost basis in an asset upon which
amortization deductions can be based, adjusted cost basis is not
determinative of whether there is in fact an intangible asset.
See, e.g., Bartolme v. Commissioner, 62 T.C. 821, 830 (1974).
Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 NextLast modified: May 25, 2011