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especially clear in the case of the exit fee. On page 20, the
majority asserts that the “purpose” of the exit fee was to
protect the integrity of the SAIF for the potential benefit of
SAIF participants. While this may have been the FDIC’s purpose,
it surely was not one of Metrobank’s business purposes.
Metrobank was never insured by the SAIF and derived no insurance
coverage from the SAIF in return for payment of the exit fee. To
the extent that “purpose” is relevant to the issue of
capitalization versus deduction, it is the payor’s (taxpayer’s)
purpose for making an expenditure that controls whether the
expenditure must be capitalized. See INDOPCO, Inc. v.
Commissioner, 503 U.S. at 85, 88-89. The majority, at pp. 20-21,
erroneously relies on the payee’s purpose for imposing the exit
fee in order to justify the payor’s (petitioner’s) deduction.
The majority allows the exit fee as an insurance expense
deduction. It justifies its conclusion that the exit fee did not
produce significant future benefits for Metrobank by finding that
all the insurance benefits from the SAIF had been received prior
to Metrobank’s acquisition of Community’s assets.6 The majority
thus rejects petitioner’s primary argument that the exit fee was
paid for deposit insurance coverage that Metrobank received
during the years in issue.7 As described on page 20 of the
6Petitioner acquired Community’s assets on Nov. 2, 1990.
7The years in issue are petitioner’s fiscal years ending
(continued...)
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