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has not shown or established the values or the useful lives of
the Rose intangibles in question. Conversely, petitioner
contends that it has shown the separate values and useful lives
of the customer accounts and that respondent has misinterpreted
the holding in Newark.
In essence, respondent’s argument is that brokerage customer
accounts differ to such an extent that they do not fall within
the factual context of the Supreme Court’s holding in Newark.
Accordingly, we begin our analysis by considering the holding in
Newark. That case involved the question of whether an acquired
list of newspaper subscribers could be amortized. In connection
with a merger, the taxpayer allocated $67.8 million of the
acquisition cost to an intangible asset consisting of a list of
460,000 identified newspaper subscribers. Each of the
subscribers was described as being under an agreement for regular
delivery of the paper in return for payment of a periodic
subscription price. The $67.8 million allocation was based on
the taxpayer’s estimate of future profits to be derived from the
identified subscribers.
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