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addressed in section 1.167(a)-3, Income Tax Regs., which
provides:
If an intangible asset is known from experience or
other factors to be of use in the business or in the
production of income for only a limited period, the
length of which can be estimated with reasonable
accuracy, such an intangible asset may be the subject
of a depreciation allowance. * * * An intangible
asset, the useful life of which is not limited, is not
subject to the allowance for depreciation. No
allowance will be permitted merely because, in the
unsupported opinion of the taxpayer, the intangible
asset has a limited useful life. No deduction for
depreciation is allowable with respect to good will.
* * *
Petitioner’s favorable financing intangible assets arise
from debt obligations in existence on January 1, 1985, that
required petitioner to pay interest to the holders at rates
below-market rates on that date. In Fed. Home Loan Mortgage
Corp. v. Commissioner, 121 T.C. at 147, we held that
“petitioner’s adjusted basis for purposes of amortizing
intangible assets under section 167(g) is the higher of regular
adjusted cost basis or fair market value as of January 1, 1985.”
In Fed. Home Loan Mortgage Corp. v. Commissioner, 121 T.C. at
272, we held that “The right to use the proceeds of financing
arrangements with below-market interest rates constitutes an
economic benefit” and that “The benefit of petitioner’s below-
market financing can, as a matter of law, constitute an
intangible asset which can be amortized if petitioner establishes
a fair market value and a limited useful life as of January 1,
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