PNC Bancorp, Inc. Successor to First National Pennsylvania Corporation, et al. - Page 40

                                         40                                           
               Petitioner's final argument is based on its observation                
          that, following our opinion in Iowa-Des Moines Natl. Bank v.                
          Commissioner, 68 T.C. 872 (1977), Congress has, on a number of              
          occasions, enacted specific legislation regarding the income                
          taxation of banks and other legislation that generally deals with           
          the capitalization of the costs of acquiring certain types of               
          assets,27 but has not availed itself of the opportunity to                  
          address the deductibility of loan origination costs.  Petitioner            
          argues that this, when coupled with the purported longstanding              
          industry practice of currently deducting costs like those in                
          issue, suggests that we should allow petitioner to continue to              
          deduct loan origination costs unless Congress acts to deny such             
          deductions.  We disagree.                                                   
               Petitioner's argument presupposes that because Congress has            
          not specifically addressed the deductibility of a particular item           
          over the years, it must mean that Congress intends for that item            
          to be currently deductible.28  Deductions, however, are matters             
          of legislative grace and are strictly construed and allowed only            
          when "'there is a clear provision therefor.'"  INDOPCO, Inc. v.             


               27For example, the capitalization provisions of sec. 263A              
          apply only to real and tangible personal property produced by the           
          taxpayer or real or personal property which is acquired for                 
          resale.  Sec. 263A does not apply to costs incurred by a                    
          financial institution in originating loans.  Sec. 1.263A-                   
          2(a)(2)(i), Income Tax Regs.                                                
               28Petitioner's argument also implies that we are somehow               
          departing from our opinion in Iowa-Des Moines Natl. Bank v.                 
          Commissioner, 68 T.C. 872 (1977).  However, as we explained supra           
          p.27, the expenditures at issue in that case did not create or              
          enhance a separate and distinct asset.                                      


Page:  Previous  22  23  24  25  26  27  28  29  30  31  32  33  34  35  36  37  38  39  40  41  Next

Last modified: May 25, 2011