- 46 -
liabilities of Community’s and undertake certain other
obligations and duties. At the time of the purchase, Metrobank
was an “insured depository institution”, within the meaning of
section 204(c) of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989, Pub. L. 101-73, 103 Stat. 191 (1989)
(hereafter, without citation, FIRREA), 12 U.S.C. sec. 1813 (c)(2)
(1988), and the purchase constituted a “conversion transaction”
(conversion transaction) within the meaning of 12 U.S.C. sec.
1815(d)(2)(B) (Supp. I, 1989). As a consequence, Metrobank
required the approval of the Federal Deposit Insurance
Corporation (the FDIC), which it obtained, to participate in the
purchase. 12 U.S.C. sec. 1815(d)(2)(A) (Supp. I, 1989). Because
the purchase constituted a conversion transaction, Metrobank was
obligated to pay the exit and entrance fees imposed by 12 U.S.C.
section 1815(d)(2)(E) (Supp. I, 1989) (the exit fee and the
entrance fee, respectively, or, collectively, the fees), which
were assessed against it by the FDIC and became its liability.
See 12 U.S.C. sec. 1815(d)(2)(F) (Supp. I, 1989); 12 C.F.R. sec.
312.10(a) (1991). Metrobank paid the fees over 5 years, as
permitted by 12 C.F.R. section 312.10(e) (1991), and deducted
each payment (the payments) on its Federal income tax return for
the year in which payment was made.
B. Issue Raised by the Pleadings
On account of Metrobank’s deductions of the payments (for
1993 through 1995), respondent determined deficiencies in tax.
Page: Previous 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 NextLast modified: May 25, 2011