In a reversal of its previously stated position, the IRS Office of Associate Chief Counsel (Income Tax & Accounting) issued a new Chief Counsel Advice which concludes that registered trademarks, trade names, mastheads, and customer-based intangibles, that can be separately described and valued apart from goodwill, qualify as like-kind property under § 1031 (CCA 200911006).
  
The Treasury Regulations under Section 1031 state that the goodwill or going concern value of one business is not of a like-kind to the goodwill or going concern value of another business (See Treas. Reg. 1.1031(a)-2(c)(2)).
 
In a 2006 Technical Advice Memorandum (TAM 200602034), the IRS concluded that because trademarks and trade names were so closely related to, if not a part of goodwill, they could not be like-kind to other trademarks or trade names. 
 
Likewise, in a 2007 Field Attorney Advice (FAA 20074401F), the Taxpayer was denied tax-deferral under Section 1031. The exchange involved newspaper assets, including mastheads, advertiser accounts and subscriber accounts. The IRS acknowledged that the assets were classified as intangible assets that are separate from the goodwill and going concern value of the newspaper. Nevertheless, the IRS concluded the assets were not like-kind because they were so closely related to, if not a part of, goodwill and going concern value.
 
 In Newark Morning Ledger Co., the IRS denied depreciation deductions for the intangible asset described as "paid subscribers" of multiple newspapers on the grounds that the asset was indistinguishable from goodwill and therefore not depreciable. The court held for petitioner however and found that the asset could be depreciated if:  1. the asset had a useful life that could be reasonably estimated, and  2. the asset could be valued. (Newark Morning Ledger Co. v. United States, 507 U.S. 546 (1993)).
 
The Office of the Associate Chief Counsel concluded that the analysis in the Newark Morning Ledger Co. case is relevant in determining whether trademarks or trade names can be like-kind.
 
 The Chief Counsel Advice opines that, except in rare and unusual situations, trademarks, trade names, mastheads and customer-based intangibles can be described and valued separately from goodwill.
 
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