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experience regarding useful life. Respondent contends that a
high degree of similarity is required, whereas petitioner’s
approach implies that a reasonable amount of similarity is
sufficient. The regulation merely uses the term “similar
property” without describing any particular degree of similarity.
As a practical matter, petitioner’s experience with discount
brokerage customer accounts is vast. The record we consider,
including Mr. Dodds’s testimony, does not differentiate, in any
meaningful way, among the accounts or customers of the various
brokers within the universe of discount brokerages. On that
basis alone, we believe that it would be prudent to hold that the
Rose accounts were sufficiently similar to permit petitioner to
invoke the use of its useful life experience under section
1.167(a)-1(b), Income Tax Regs.26
Petitioner also references a case where this Court held that
comparable assets were sufficient to meet the “similar”
requirement. In Colo. Natl. Bankshares, Inc. v. Commissioner,
T.C. Memo. 1990-495, affd. 984 F.2d 383 (10th Cir. 1993), the
Court recognized that NOW bank accounts were relatively new with
little data available on their useful life. Recognizing that
26 Petitioner also notes that the regulation provides that
in situations where a taxpayer’s experience is not adequate,
industry experience is to be used. In that regard, petitioner
states that no such industry study exists but rationalizes that
petitioner’s experience would dominate any industry study because
of its 42.4-percent market share.
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