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took the view that our opinion there was inapplicable to this
case because, they claimed, the cases were factually
distinguishable. We held in PNC Bancorp, Inc., v. Commissioner,
supra, that loan origination costs were capital expenditures.
The Court of Appeals for the Third Circuit disagreed, holding
that the costs were deductible expenses. Petitioners now assert
that PNC Bancorp, Inc. is relevant to our inquiry.
We do not believe that PNC Bancorp, Inc. v. Commissioner,
supra, is so factually distinguishable from the instant case to
support contrary results. Although the cases are obviously
distinguishable by virtue of the fact that PNC (as defined below)
was a loan originator and ACC is a loan acquirer, we do not
believe that this bare distinction is meaningful enough to
support contrary results in the cases, especially given the
Supreme Court’s statements in Commissioner v. Idaho Power Co.,
supra at 12-13, to the effect that the creation of an asset is
subject to the same set of capitalization rules as the
acquisition of an asset. Given the additional fact that the
Court of Appeals for the Third Circuit disagreed with our view as
to the rules of capitalization applicable to the loan origination
costs in PNC Bancorp, Inc., we believe it appropriate to
reconsider our opinion there in light of the contrary view set
forth by the Court of Appeals for the Third Circuit in reversing
our decision. We have carefully done so, giving due regard to
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