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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