- 24 - 1379 (“an expenditure that would ordinarily be a deductible expense must nonetheless be capitalized if it is incurred in connection with the acquisition of a capital asset”); cf. A.E. Staley Manufacturing Co. & Subs. v. Commissioner, 119 F.3d 482, 489 (7th Cir. 1997) (costs are capital expenditures if they are “associated with” facilitating a capital transaction), revg. on other grounds and remanding 105 T.C. 166 (1995); Central Tex. Sav. & Loan Association v. United States, 731 F.2d 1181, 1184 (5th Cir. 1984) (“expenditures incurred in the acquisition of a capital asset must generally be capitalized”); Commissioner v. Wiesler, 161 F.2d 997, 999 (6th Cir. 1947) (“well settled rule that expenditures incurred as an incident to the acquisition or sale of property are not ordinary and necessary business expenses, but are capital expenditures which must be added to the cost of the property”), affg. 6 T.C. 1148 (1946). Capitalizable expenditures are not limited to the actual price that the buyer pays to the seller for the asset but include, for example, the payment of legal, brokerage, accounting, appraisal and other “ancillary” expenses related to the asset’s acquisition. Woodward v. Commissioner, supra at 576-577; see United States v. Hilton Hotels Corp., 397 U.S. 580 (1970); see also Ellis Banking Corp. v. Commissioner, supra at 1379. Capitalizable expenditures also include compensation paid for services performed in connection with an asset’s acquisition,Page: Previous 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Next
Last modified: May 25, 2011