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petitioner is entitled to an abandonment loss equal to the value
of the acquired intangibles it abandoned after the business
acquisition.
FINDINGS OF FACT5
Petitioner comprises three corporations that file
consolidated Federal corporate income tax returns. The group
consists of the Charles Schwab Corp., a Delaware corporation, its
first-tier subsidiary, Schwab Holdings, Inc., a Delaware
corporation, and its second-tier operating subsidiary, Charles
Schwab & Co., Inc., a California corporation. At the time of the
filing of the petitions in these consolidated cases, petitioner’s
principal office was in San Francisco, California.
Petitioner provides discount securities brokerage and
related financial services, primarily to individuals, throughout
the United States and is a member of all major U.S. securities
exchanges. During the years under consideration, the principal
service petitioner provided was to execute trade orders to
facilitate sales and purchases of stock and securities on behalf
of customers. Petitioner’s business strategy was to serve self-
directed customers who either did not require research,
investment advice, or portfolio management or did not desire to
5 The parties’ stipulations of fact are incorporated by this
reference. Over the period from March 2000 through October 2002,
the parties entered into six stipulations of fact with exhibits,
all of which have been received into evidence.
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