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gain or loss. Section 167(g) requires the basis for depreciation
or amortization be the same basis as the basis for determining
gain. Since petitioner’s adjusted cost basis and fair market
value in its assets are ascertainable as of January 1, 1985, and
since DEFRA section 177(d)(2)(A)(ii) provides that the adjusted
basis for determining gain is the higher of those two amounts,
petitioner’s adjusted basis for amortization of its intangibles
is determinable as of that date. Any subsequent sale or
disposition of those intangibles has no bearing on this
comparison.
We hold that petitioner’s adjusted basis for purposes of
amortizing intangible assets under section 167(g) is the higher
of regular adjusted cost basis or fair market value as of January
1, 1985.20
An appropriate order
will be issued.
20We express no opinion at this time whether petitioner
actually held the claimed intangible assets on Jan. 1, 1985,
their value on that date, or whether such putative assets are
amortizable.
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