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In this opinion, we decide whether, for purposes of
computing a deduction for amortization, the adjusted basis of any
amortizable intangible assets that petitioner held on January 1,
1985, is the regular adjusted cost basis provided in section 1011
or the higher of the regular adjusted cost basis or fair market
value of such assets on January 1, 1985, as provided in the
Deficit Reduction Act of 1984 (DEFRA), Pub. L. 98-369, sec. 177,
98 Stat. 709.
Background
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time of filing the
petition, petitioner’s principal office was located in McLean,
Virginia. At all relevant times, petitioner was a corporation
managed by a board of directors.
Petitioner was chartered by Congress on July 24, 1970, by
the Emergency Home Financing Act of 1970, Pub. L. 91-351, title
III (Federal Home Loan Mortgage Corporation Act), 84 Stat. 451.
Petitioner was originally exempt from Federal income taxation.
However, Congress repealed petitioner’s Federal income tax
exemption status in DEFRA section 177. Pursuant to this Act,
petitioner became subject to Federal income taxation, effective
January 1, 1985.
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