Gulf Tel. Corp. v. Commissioner
United States Tax Court
In 1956 petitioner purchased a television station for $ 4,800,000 of which $ 2,700,000 was allocated by petitioner to the purchase price of a network affiliation contract which the station had with CBS. This contract like all network affiliation contracts was for 2 years (the maximum period permitted by the FCC) but was automatically renewable for successive 2-year terms unless either party gave 6 months' written notice of intention not to renew.
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In 1956 petitioner purchased a television station for $ 4,800,000 of which $ 2,700,000 was allocated by petitioner to the purchase price of a network affiliation contract which the station had with CBS. This contract like all network affiliation contracts was for 2 years (the maximum period permitted by the FCC) but was automatically renewable for successive 2-year terms unless either party gave 6 months' written notice of intention not to renew. At the time it was acquired by petitioner at an allocated cost of $ 2,700,000, 19 months of a 2-year term had yet to run. The contract was still in…
1Opinion of the Court
OPINION
Kern, Judge:
Petitioner in its income tax returns for the taxable years took deductions on account of the depreciation or amortization of a “CBS Network affiliation contract.” The methods used by petitioner in calculating the amounts of these deductions are described in the stipulation as follows:
On September 1, 1956, petitioner, on its books of account, commenced to amortize its claimed basis of $2,740,000 allocated to tbe CBS affiliation contract, in nineteen equal monthly installments ending March 30, 1958. Beginning October 1, 1957, when the contract was extended for an additional…
Also in this document: Concurrence.
2Cases cited27 opinions
- Commissioner v. CulbertsonSupreme Court of the United States · 1949
- Burnet v. Niagara Falls Brewing Co.Supreme Court of the United States · 1931
- Estate of Cora R. Fitts, Deceased, J. Russel Fitts and Frank E. Tyler, Co-Executors v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1956
- Westinghouse Broadcasting Company, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1962
- Westinghouse Broadcasting Co. v. CommissionerUnited States Tax Court · 1961
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3Cited by15 opinions
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- Roy H. Park Broadcasting, Inc. v. CommissionerUnited States Tax Court · 1982
- Roy H. Park Broadcasting, Inc. v. CommissionerUnited States Tax Court · 1971
- Rodeway Inns of America v. CommissionerUnited States Tax Court · 1974
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