Metrocorp, Inc. - Page 19




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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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