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losses associated with delinquent loan repayments, on the one
hand, as compared to the interest income ACC receives each year
on the installment loans, on the other hand. For Federal income
tax matching purposes, those expenses and income would appear to
be matched fully and completely on ACC’s annual Federal income
tax returns, as filed. To now require capitalization, as
respondent would, of a portion of ACC’s regular and routine
salary and overhead expenses, on the ground that they somehow
relate directly to the acquisition of specific installment loans
would, in my opinion, reflect a misunderstanding of the true
nature (1) of ACC’s underlying business activity, (2) of ACC’s
costs and expenses, and (3) of ACC’s income and profit.
As the majority opinion states (majority op. p. 4), ACC was
formed “to provide alternate financing”. ACC’s credit
investigations and its credit risk decisions relating thereto
represent just one of the steps (and certainly not the dominant
step) in ACC’s business of credit intermediation (i.e., of
providing “financing”).2
2 I acknowledge that the majority opinion (majority op. p.
4) is less than clear in its statement of the business purpose of
ACC. Nevertheless, the majority does acknowledge the important
role of ACC in providing “financing”, which in my opinion and
experience involves much more than just investigating loan
applicants and approving or rejecting the applications.
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