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We recognize that capitalization is not required for every
cost that produces any future benefit. However, we do not agree
with petitioner's proposition that the claimed purpose of the
expenditures--to protect, promote, or expand its existing
business--is controlling. Rather than attempting to assign the
expenditures to a specific classification, such as expansion
costs, we believe that the more important question is whether the
expenditures in issue provide a significant future benefit to
petitioner.
Finally, petitioner argues that the legislative history of
section 195 supports its position that the expenditures here do
not create the "type" of future benefit that must be capitalized.
Petitioner contends that Congress explicitly recognized the
current deductibility of the costs of expanding an existing trade
or business when it enacted section 195 to deal with the costs of
starting a new trade or business. Section 195 was enacted by the
Miscellaneous Revenue Act of 1980, Pub. L. 96-605, sec. 102(a),
94 Stat. 3522, and was amended by the Deficit Reduction Act of
1984, Pub. L. 98-369, sec. 94(a), 98 Stat. 614. Section 195, as
originally enacted in 1980, defined "startup expenditure" to mean
any amount
(1) paid or incurred in connection with--
(A) investigating the creation or acquisition of an
active trade or business, or
(B) creating an active trade or business, and
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