- 30 -
Finally, we are not concerned that our holding is
inconsistent with petitioner’s treatment of its alleged favorable
financing on its financial statements. Admittedly, petitioner
did not report its alleged favorable financing as an intangible
asset on its books or records, and it is not at all clear whether
reporting this claimed intangible as an asset would be in
accordance with Generally Accepted Accounting Principles.
However, we have previously indicated that a failure to report a
claimed intangible asset on financial statements or regulatory
reports is not an impediment to a taxpayer’s entitlement to
amortization deductions. IT&S of Iowa, Inc. v. Commissioner, 97
T.C. at 511; see also Bartolme v. Commissioner, 62 T.C. 821, 830-
832 (1974).16 Our resolution of the legal question in these
cases is, in any event, not dependent upon accounting principles
or whether the claimed intangible asset was or was not reported
as an asset on petitioner’s books or records.
Our holding regarding below-market financing is supported by
at least one notable treatise. In an analysis of the treatment
of interests in debt obligations under postsection 197 law, 1
Ginsburg & Levin, Mergers, Acquisitions, and Buyouts, par.
16We also point out that in Peoples Bancorporation & Subs.
v. Commissioner, T.C. Memo. 1992-285, the Commissioner advocated
the position that the treatment of core deposits as an asset for
financial and regulatory accounting purposes should be irrelevant
for tax purposes.
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