Broadvox could not run $3.162 million of bankruptcy-related payments through cost of goods sold. It had to capitalize them as part of the price of buying Infotelecom’s assets.
Holding
The Tax Court agreed with the IRS. Broadvox had to treat the $3.162 million paid to resolve Infotelecom’s AT&T and Verizon bankruptcy claims as part of the cost of acquiring…
