FMR Corp. and Subsidiaries - Page 1

                                   110 T.C. No. 30                                    

                               UNITED STATES TAX COURT                                

                      FMR CORP. AND SUBSIDIARIES, Petitioner v.                       
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 15711-94.              Filed June 18, 1998.                 

                    P provides investment management services to                      
               regulated investment companies (RIC's), which are                      
               commonly referred to as mutual funds.  During the years                
               in issue, P incurred costs for developing and launching                
               82 new RIC's.  The expenditures incurred in launching                  
               new RIC's were intended to, and did, provide                           
               significant future benefits to P.                                      
                    Held:  The expenditures are not currently                         
               deductible under sec. 162(a), I.R.C., and must be                      
               capitalized under sec. 263(a), I.R.C.                                  
                    Held, further:  P failed to establish a limited                   
               life for the future benefits obtained from the costs of                
               launching RIC's.  P may not amortize such costs under                  
               sec. 167, I.R.C.                                                       

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