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Respondent makes no assertion that either fee created or
enhanced a separate and distinct capital asset. Respondent’s
sole argument in support of the determination is that the fees
generated for Metrobank the proffered benefits listed supra p.
10, which, respondent asserts, are significant long-term benefits
to Metrobank. We disagree with respondent that any of these
benefits are significant long-term benefits which would require
either fee’s capitalization. Although the fees may arguably have
produced one or more future benefits for Metrobank, none of those
benefits, when considered either separately or together, is
enough to characterize either fee as a capitalizable expense.
Under the requisite test, capitalization is not always required
when an incidental future benefit is generated by an expense.
See INDOPCO, Inc. v. Commissioner, supra at 87.
We are unable to find as a fact that Metrobank’s payment of
either fee produced for Metrobank a significant future benefit
requiring capitalization. Whether a benefit is significant to
the taxpayer who incurs the underlying expense rests on the
duration and extent of the benefit, and a future benefit that
flows incidentally from an expense may not be significant. See
id. at 87-88. We find as a fact that Metrobank’s payment of the
fees produced for it no significant long-term benefit.
Metrobank did not pay either fee as a condition to obtaining
FDIC insurance in the first place. Metrobank always had and,
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