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In Turner Outdoor Adver., Ltd. v. Commissioner, T.C. Memo.
1995-227, in concluding that a group of leasehold interests did
not constitute a depreciable intangible asset, we explained that
“The critical question is the overall value of the leasehold
interests, and that amount must be shown with ‘reasonable
accuracy’.” Id. (quoting in part Newark Morning Ledger Co. v.
United States, supra at 566).
Some further discussion is appropriate with regard
specifically to claimed section 165(a) loss deductions relating
to intangible assets. Section 165(a) allows an ordinary
deduction for a business loss sustained during a year where the
loss is not compensated for by insurance or otherwise. The
amount of a loss deduction under section 165(a) is limited to the
taxpayer’s adjusted tax basis in the asset lost. Sec. 165(b).
The relevant regulations under section 165 make it clear
that loss deductions are allowable not just for losses relating
to tangible, depreciable property, but also for losses relating
to nondepreciable property. Section 1.165-2(a), Income Tax
Regs., provides in part as follows:
A loss incurred in a business or in a transaction
entered into for profit and arising from the sudden
termination of the usefulness in such business or
transaction of any nondepreciable property, in a case
where such business or transaction is discontinued or
where such property is permanently discarded from use
therein, shall be allowed as a deduction under section
165(a) for the taxable year in which the loss is
actually sustained. * * * [Emphasis added.]
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