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Congress recognized that DEFRA section 177(d)(2)(A)(ii) would
otherwise have provided the adjusted basis for the depreciation
(or amortization) of all property under section 167(g). Since
the special rule of DEFRA section 177(d)(2)(B) applies only to
tangible depreciable property, it follows that DEFRA section
177(d)(2)(A)(ii) provides the adjusted basis for the amortization
of all assets other than tangible depreciable property. It also
follows that any amortizable intangibles that petitioner held on
January 1, 1985, are to be amortized using the basis rule
provided in DEFRA section 177(d)(2)(A)(ii).
Respondent contends that Congress did not provide a special
exception similar to the exception contained in DEFRA section
177(d)(2)(B) for intangibles, because Congress was not aware that
petitioner held any of the alleged intangibles at the time of the
enactment of DEFRA. He points out that, since its inception,
petitioner has been required by statute to provide its financial
statements to Congress, and petitioner has not reported any of
the alleged intangibles as assets on its books or on any
financial statement. He speculates that while Congress would
have been aware of petitioner’s tangible depreciable properties
from a review of the financial statements, and this might explain
why Congress explicitly provided basis rules for depreciation of
those properties in DEFRA section 177(d)(2)(B), Congress would
not have been aware of any intangibles since none were apparently
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