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and to syndication expenses,16 none of which are currently
deductible. Secs. 248(a); 709(a).
Petitioner argues that the costs associated with these
activities are not organization costs with regard to petitioner
because the costs do not relate to its capital structure and were
incurred solely to maintain and promote its investment management
business. Nevertheless, much like the reorganization
expenditures in E.I. du Pont de Nemours & Co. v. United States,
supra, we find that the costs incurred by petitioner here
"resulted in a benefit to the taxpayer which could be expected to
16Sec. 1.709-2(a), Income Tax Regs., provides the following
examples of partnership organizational expenditures:
Legal fees for services incident to the organization of
the partnership, such as negotiation and preparation of
a partnership agreement; accounting fees for services
incident to the organization of the partnership; and
filing fees. * * *
Sec. 1.709-2(b), Income Tax Regs., defines syndication
expenses as follows:
Syndication expenses are expenses connected with the
issuing and marketing of interests in the partnership.
Examples of syndication expenses are brokerage fees;
registration fees; legal fees of the underwriter or
placement agent and the issuer (the general partner or
the partnership) for securities advice and for advice
pertaining to the adequacy of tax disclosures in the
prospectus or placement memorandum for securities law
purposes; accounting fees for preparation of
representations to be included in the offering
materials; and printing costs of the prospectus,
placement memorandum, and other selling and promotional
material. * * *
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