- 69 -
The amicus for FNMA concludes as to the salaries and
benefits that capitalizing these costs will administratively
burden ACC. We disagree. It was ACC that identified these costs
for its auditors in order to capitalize the costs for financial
accounting purposes. Contrary to the amicus’ assertion, under
the facts of this case, it is not “impossible” to identify the
portion of the salaries and benefits which are attributable to
each installment contract.35
We now turn to the PPM-related expenditures. Respondent
determined and argues that ACC must capitalize these
expenditures. Respondent points to the fact that the repayment
of the Notes extended beyond the year of their issuance.
Petitioners maintain that the PPM expenditures are currently
deductible. Petitioners repeat many of the same arguments which
we have rejected as to the salaries and benefits, stressing their
assertion that ACC issued the Notes in order to obtain funds to
acquire installment contracts in the ordinary course of its
business. Petitioners also add, with citations to Bonded
Mortgage Co. v. Commissioner, 70 F.2d 341 (4th Cir. 1934), revg.
and remanding 27 B.T.A. 965 (1933), and Franklin Title & Trust
Co. v. Commissioner, 32 B.T.A. 266 (1935), that financing
35 The amicus also raises an issue as to whether ACC’s
income was reflected clearly, within the meaning of sec. 446(b),
by its deduction of the salaries and benefits. This issue was
not raised by the parties and is not before the Court. We
decline the amicus’ invitation to address it.
Page: Previous 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 NextLast modified: May 25, 2011