110 T.C. No. 27
UNITED STATES TAX COURT
PNC BANCORP, INC., SUCCESSOR TO FIRST NATIONAL
PENNSYLVANIA CORPORATION, ET AL.,1 Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 16002-95, 16003-95, Filed June 8, 1998.
16109-96, 16110-96.
As a result of mergers, P succeeded to the
interests of two banks. During the years in issue, the
banks' primary source of revenue was interest charged
on loans. In the process of making loans, the banks
incurred costs for property reports, credit reports,
appraisals, recording security interests, and salaries
and benefits to bank employees. The lives of the loans
extended beyond the year in which the expenditures were
incurred. For financial accounting purposes, loan
origination expenditures related to completed loans
were capitalized and amortized over the life of the
loans. For Federal tax purposes, these expenditures
were deducted in the year incurred. P argues that,
1The following cases are consolidated: PNC Bancorp, Inc.,
Transferee of Assets of First National Pennsylvania Corporation,
docket No. 16003-95; PNC Bancorp, Inc., Successor to United
Federal Bancorp, Inc., and Subsidiaries, docket No. 16109-96; and
PNC Bancorp, Inc., Transferee of Assets of United Federal
Bancorp, Inc., and Subsidiaries, docket No. 16110-96.
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