- 73 -
I believe the facts noted below reflect the noncapital,
ordinary and necessary nature of all of the salary and overhead
expenses that are in issue herein and should control resolution
of this fact issue.
(1) The salaries ACC paid were routine, reasonable and
recurring, and the amounts thereof, including increases and
bonuses thereto, were tied to overall net company profits, not to
the acquisition of specific installment loans. As the Supreme
Court explained:
Of course, reasonable wages [salaries] paid
in the carrying on of a trade or business
qualify as a deduction from gross income.
* * * [Commissioner v. Idaho Power Co., 418
U.S. 1, 13 (1974); emphasis added.]
(2) Generally, and for the most part, the specific benefits
initially received by ACC from the services of its employees
investigating proposed installment loans (namely, the receipt of
information needed to review the creditworthiness of potential
debtors on the installment loans) were exhausted or lost by ACC
almost simultaneously with the receipt of the benefits (i.e., for
various reasons the large majority of the proposed installment
loans that were investigated and considered by ACC were abandoned
within a day (majority op. p. 9)). In my opinion, this fact
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