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.
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