In 2017, your client, Clear Corporation, changed from the cashto the accrual method of accounting for its radio station. Thecompany had a positive § 481 adjustment of $2.4 million as a resultof the change and began amortizing the adjustment in 2017. In 2018,Clear received an offer to sell the assets of the radio stationbusiness (this would be considered a sale of a trade or businessunder §1060). If the offer is accepted, Clear plans to purchase asatellite television business. Clear has asked you to explain theconsequences of the sale of the radio station on the amortizationof the §481 adjustment.
