IT&S of Iowa, Inc. v. Commissioner
United States Tax Court
P, a State bank, acquired the assets and liabilities of another State bank, W. P allocated a portion of the purchase price to a core deposit intangible asset, based on its calculation of the cost savings realized by using the core deposits, rather than an alternative funding source, to fund P's assets. After allocation of the purchase price among specific assets, including the core deposit intangible, P allocated the residual amount of the purchase price to goodwill.
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P, a State bank, acquired the assets and liabilities of another State bank, W. P allocated a portion of the purchase price to a core deposit intangible asset, based on its calculation of the cost savings realized by using the core deposits, rather than an alternative funding source, to fund P's assets. After allocation of the purchase price among specific assets, including the core deposit intangible, P allocated the residual amount of the purchase price to goodwill. P claimed amortization deductions on account of the core deposit intangible asset based on the present value of the cost…
1Opinion of the Court
WELLS, Judge:
Respondent determined deficiencies in petitioners’ Federal income tax as follows:
Year Deficiency
1972 . $6,703
1974 . 75,008
1979 . 1,241
1984 . 77,252
After stipulations by the parties, the issues remaining in the instant case relate to petitioners’ entitlement to depreciate, under section 167,1 the value of a core deposit intangible asset acquired in the purchase of another bank. The issues we address are: (1) Whether petitioners have established that the core deposit intangible of the acquired bank has an ascertainable value separate and distinct from goodwill; (2) whether…
2Cases cited20 opinions
- Cohan v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1930
- Frank Lyon Co. v. United StatesSupreme Court of the United States · 1978
- Buffalo Tool & Die Mfg. Co. v. CommissionerUnited States Tax Court · 1980
- Parker v. CommissionerUnited States Tax Court · 1986
- Richard M. Boe and Mary Lots Boe v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1962
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- Martin Ice Cream Co. v. Comm'rUnited States Tax Court · 1998
- Trans City Life Ins. Co. v. CommissionerUnited States Tax Court · 1996
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