Cite as: 507 U. S. 546 (1993)
(a) While the depreciation allowance of § 167(a) of the Internal Revenue Code applies to intangible assets, the IRS has consistently taken the position that goodwill is nondepreciable. Since the value of customer-based intangibles, such as customer and subscriber lists, obviously depends on continued and voluntary customer patronage, the question has been whether these intangibles can be depreciated notwithstanding their relationship to such patronage. The "mass asset" rule that courts often resort to in considering this question prohibits depreciation when the assets constitute self-regenerating assets that may change but never waste. Pp. 553-560. (b) Whether or not taxpayers have been successful in separating depreciable intangible assets from goodwill in any particular case is a question of fact. The question is not whether an asset falls within the core of the concept of goodwill, but whether it is capable of being valued and whether that value diminishes over time. Pp. 560-566. 2. Petitioner has borne successfully its substantial burden of proving that "paid subscribers" constitutes an intangible asset with an ascertainable value and a limited useful life, the duration of which can be ascertained with reasonable accuracy. It has proved that the asset is not self-regenerating but rather wastes as a finite number of component subscriptions are canceled over a reasonably predictable period of time. The Government presented no evidence to refute the methodology petitioner used to estimate the asset's fair market value, and the uncontroverted evidence presented at trial revealed that "paid subscribers" had substantial value over and above that of a mere list of customers, as it was mistakenly characterized by the Government. Pp. 566-570.
945 F. 2d 555, reversed and remanded.
Blackmun, J., delivered the opinion of the Court, in which Stevens, O'Connor, Kennedy, and Thomas, JJ., joined. Souter, J., filed a dissenting opinion, in which Rehnquist, C. J., and White and Scalia, JJ., joined, post, p. 571.
Robert H. Bork argued the cause for petitioner. With him on the briefs were Bernard J. Long, Jr., Albert H. Turkus, Linda A. Fritts, Judith A. Mather, Corinne M. Antley, Peter C. Gould, and Steven Alan Reiss.
Deputy Solicitor General Wallace argued the cause for
the United States. With him on the brief were Solicitor General Starr, Acting Assistant Attorney General Bruton,
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