Opinion of the Court
would not be depleted due to the passage of time or as a result of use. The turnover rate of employees represents merely the ebb and flow of a continuing work force. An employee's leaving does not interrupt or destroy the continued existence of the whole." Id., at 267.
As a factual matter, the Tax Court found that the taxpayer hired a new worker only so it could replace a worker "who resigned, retired, or was fired." Id., at 268. The court found that the "assembled work force" was a nondiminishing asset; new employees were trained in order to keep the "assembled work force" unchanged, and the cost of the training was a deductible expense. Id., at 271.
Since 1973, when Houston Chronicle clarified that the availability of the depreciation allowance was primarily a question of fact, taxpayers have sought to depreciate a wide variety of customer-based intangibles. The courts that have found these assets depreciable have based their conclusions on carefully developed factual records. In Richard S. Miller & Sons, Inc. v. United States, 210 Ct. Cl. 431, 537 F. 2d 446 (1976), for example, the court considered whether a taxpayer was entitled to a depreciation deduction for 1,383 insurance expirations that it had purchased from another insurer.10 The court concluded that the taxpayer had carried its heavy burden of proving that the expirations had an ascertainable value separate and distinct from goodwill and had a limited useful life, the duration of which could be ascertained with reasonable accuracy. The court acknowledged
10 An "expiration" is a copy of the face of an insurance policy made when the policy is issued. It shows the name of the insured, the type of insurance, the premium, the covered property, and the expiration date. "Its principal value in the insurance business is its indication of the most advantageous time to solicit a renewal." Richard S. Miller & Sons, Inc. v. United States, 210 Ct. Cl., at 436, 537 F. 2d, at 450.Page: Index Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
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