FMR Corp. and Subsidiaries - Page 31

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          Like the taxpayer in Fall River Gas Appliance Co., petitioner               
          believed that by launching the RIC's it would derive a continuing           
          economic benefit.13                                                         
               The expenditures at issue bear other indicia of capital                
          expenditures.  The right to market the investment concept,                  
          obtained through the process of executing the contract with the             
          individual RIC14 and filing with the SEC and individual States,             
          is similar to the rights obtained by the taxpayers in P. Liedtka            
          Trucking, Inc. v. Commissioner, 63 T.C. 547 (1975), and Surety              
          Ins. Co. v. Commissioner, T.C. Memo. 1980-70.  In P. Liedtka                
          Trucking, Inc. v. Commissioner, supra, the taxpayer, a trucking             
          business, incurred legal fees in connection with the acquisition            
          of a Certificate of Public Convenience and Necessity issued by              
          the Interstate Commerce Commission (ICC), which was required in             
          order to use several routes between various points in New York,             
          New Jersey, and Pennsylvania.  The taxpayer deducted these costs            
          as an ordinary expense.  We held that the costs incurred in                 


               13See Union Mut. Life Ins. Co. v. United States, 570 F.2d              
          382, 392 (1st Cir. 1978) ("expenditures made with the                       
          contemplation that they will result in the creation of a capital            
          asset cannot be deducted" even though those expenditures were               
          found to be regularly occurring and did not actually result in              
          the acquisition of an asset.)                                               
               14On brief, petitioner states:  "The [management] contract             
          provides the petitioner with nothing more than an opportunity to            
          try to attract investment to the fund."  Petitioner further                 
          states:  "The use of the mutual fund as an intermediary mechanism           
          between an advisor, such as the petitioner, and individual                  
          investors is dictated by the practicalities of the market."                 




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