- 19 - collectively referred to as "RIC launching activities". No activities incurred after the launch of a new RIC, such as advertising or subsequent annual SEC filings, are included in RIC launching activities, and respondent has not challenged the deductibility of the cost of such postlaunch activities. Petitioner estimates its total costs for RIC launching activities for 81 new RIC's were $1,259,226, $1,591,010, and $659,772, in 1985, 1986, and 1987, respectively. During 1985, petitioner launched a RIC, the estimated costs of which were not included in either the notice of deficiency or the costs stated above. The estimated cost to launch this RIC was $116,318, thereby making the 1985 total cost of RIC launching $1,375,544. Respondent accepts petitioner's estimates for purposes of conclusively establishing the amounts in issue in the instant case. OPINION The principal issue for decision is whether petitioner is entitled to a section 162(a) deduction for expenditures incurred in launching 82 RIC's during the years in issue. Section 162(a) allows as a deduction "all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business". To qualify as an allowable deduction under section 162(a), an item must: (1) Be paid or incurred during the taxablePage: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Next
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