- 2 -
continued to use S to insure the assumed deposit
liabilities.
Held: M’s payment of the fees produced no
significant future benefit to M that would require
capitalization of either fee.
OPINION
James R. Walker and Charles L. Mastin II for petitioner.
Jennifer L. Nuding, for respondent.
LARO, Judge: The parties submitted this case to the Court
without trial. See Rule 122. Respondent determined deficiencies
of $15,288, $14,372, and $14,375 in petitioner’s respective
taxable years ended October 31, 1993, 1994, and 1995. Following
concessions, we must decide whether petitioner may deduct the
exit and entrance fees which its subsidiary, Metrobank, paid to
the Federal Deposit Insurance Corporation (FDIC) with respect to
a “conversion transaction” under 12 U.S.C. sec. 1815(d)(2)(B)(iv)
(1994). We hold it may.1 Unless otherwise indicated, section
references are to the Internal Revenue Code applicable to the
relevant years. Rule references are to the Tax Court Rules of
Practice and Procedure.
Background
The parties have filed with the Court a stipulation of facts
and certain related exhibits. We incorporate herein by reference
that stipulation of facts and those exhibits. We find the
1 Our holding renders moot the parties’ other dispute;
namely, whether the fees, if capitalizable, are amortizable.
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