- 67 -
We disagree with the additional arguments set forth by the
amicus for FNMA as to petitioners’ first assertion. The rule of
section 1.263(a)-1(b), Income Tax Regs., upon which the amicus
relies is merely a general rule that is not intended to contain
the sole parameters of capitalization under section 263(a). Nor
do the amici rely correctly on our Memorandum Opinion in Mayer v.
Commissioner, supra. There, the taxpayer was an individual who
argued that he could capitalize his investment-related expenses.
We held he could not because he failed to meet his burden of
proof.
Nor are we persuaded by petitioners’ second assertion that a
body of law treats the salaries and benefits as deductible
expansion costs. As to the body of cases relied upon by
petitioners, we have discussed at length our disagreement with
their reading of these cases and adhere to our belief that none
of the cases supports the result that they desire. Nor does the
record at hand persuade us that any of the salaries and benefits
were incurred in expansion of ACC’s business.33 Even if they
could be construed to be expansion costs, which as just mentioned
we do not find that they are, petitioners would still not
prevail. Simply because a cost may qualify as an expansion cost
33 In fact, petitioners’ assertion that the costs were
related to an expansion of ACC’s business is inconsistent with
their primary argument that the expenditures were incurred
routinely in ACC’s everyday business.
Page: Previous 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 NextLast modified: May 25, 2011