- 25 -
explained in INDOPCO, Inc. v. Commissioner, 503 U.S. at 86-87, it
was not articulating any new legal standard in holding that
capitalization is required when expenditures provide the taxpayer
with significant future benefits.
Petitioner has failed to prove that its $20 million
contribution to VEBA II in 1985 constitutes an ordinary and
necessary business expense pursuant to section 162(a). Rule
142(a); INDOPCO, Inc. v. Commissioner, supra at 84. Respondent's
determination is, therefore, sustained.
Decision will be entered
for respondent.
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