- 3 -
1992 income taxes of $2,245,332, $2,797,349, $3,101,526, and
$827,683, respectively. By means of amended answers, respondent
asserts increased income tax deficiencies of $2,644,782,
$2,906,015, $3,210,191, and $936,349 for petitioner’s tax years
1989, 1990, 1991, and 1992, respectively.3 The issues presented
for our consideration are: (1) Whether section 461(d)4
proscribes certain California franchise tax deductions petitioner
claims; (2) whether petitioner’s acquired discount stock
brokerage customer accounts may be amortized; (3) if the customer
accounts may be amortized, whether petitioner has established
their fair market value; (4) whether petitioner has shown the
“useful lives” of certain customer accounts for purposes of
amortization; and (5) alternatively, if petitioner is
unsuccessful regarding issues (2), (3), and (4), whether
3 In the amended answers, respondent asserted increased
deficiencies attributable to the franchise tax issue and the
amortization of intangibles. For 1989, respondent made no
determination with respect to the franchise tax deduction
petitioner claimed. After the notice of deficiency was issued,
petitioner was successful in claiming the amount originally
claimed in 1989 in its short year ended Dec. 31, 1988.
Accordingly, respondent asserts an increased deficiency to
account for petitioner’s change in position. As to the
amortization of intangibles, respondent originally determined
that petitioner was entitled to some amortization. Respondent
changed his position in the amended answer, denying petitioner
any amortization and asserting increased deficiencies.
4 Section references are to the Internal Revenue Code in
effect for the periods under consideration. Rule references are
to the Tax Court Rules of Practice and Procedure.
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