Court Opinion

ID: 4499648
Source: CourtListenerOpinion
Date Created: 2020-01-23 18:16:33.120971+00
Date Added: 2024-06-11T14:54:17.502589
License: Public Domain

*1256OPINION.
MoRRis:
There is no doubt that the circulation structure of ' a newspaper is a capital asset, Appeal of Danville Press, Inc., 1 B. T. A. 1171; Appeal of Gardner Printing Co., 4 B. T. A. 37. It is likewise well settled that the circulation structure of a daily newspaper is an intangible asset. Appeal of Herald-Despatah Co., 4 B. T. A. 1096. When such an asset is purchased, the amount expended therefor is a capital expenditure. Appeal of Gardner Printing Co., supra; Appeal of Pevely Dairy Co., 1 B. T. A. 385; Appeal of Goodell-Pratt Co., 3 B. T. A. 30.
The specific question presented by this proceeding is whether when such an asset is developed, by the corporation itself and the cost thereof charged to expense, such cost is a capital expenditure. The facts show that the purpose of the two campaigns was not only to maintain the number of subscribers, but to increase it. To the extent ¡that the expenditures maintained the number of subscribers, they may be ordinary and necessary expenses, but we are unable to determine the amount allocable thereto. The Commissioner held that they were capital expenditures, and we can not determine from the record that he erred in that regard.

Judgment will be entered for the respondent.