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transactions but also to other types of transactions generating
losses, such as the contract terminations involved herein. Our
conclusion is supported by a plain reading of TRA 1986 section
1012(c)(3)(A)(ii) and is consistent with and does not frustrate
the overall purpose of TRA 1986 section 1012(c)(3)(A)(ii).
The Valuation of Petitioner’s
Health Insurance Group Contracts
Before discussing the evidence before us relating to the
valuation of petitioner’s health insurance group contracts, we
discuss legal precedent particularly relevant to the valuation of
customer-based intangible assets where tax deductions and losses
are claimed with regard thereto. The court opinions typically
frame the issue as whether a taxpayer’s evidence, valuation, and
(where relevant) useful life determination relating to the
intangible assets are adequate to support the separate and
discrete tax treatment claimed. Where the taxpayer’s evidence is
found to be lacking, the intangible assets may be referred to as
“mass assets”.
In Houston Chronicle Publg. Co. v. United States, 481 F.2d
1240 (5th Cir. 1973), the Court of Appeals for the Fifth Circuit
upheld a District Court’s opinion that allowed a newspaper
publisher to depreciate the cost of subscription lists that had
been purchased from another publisher. In reaching its
conclusion in Houston Chronicle Publg. Co., the Court of Appeals
discussed at length and generally rejected the general argument
made by the Government therein that the “mass asset” or
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