Metrocorp, Inc. - Page 46




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          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.              




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