Metrocorp, Inc. - Page 55




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          exit fee constituted anything other than a cost incident to the             
          purchase and, therefore, a capital expenditure.  Petitioner has             
          failed to prove its entitlement to a deduction on account of                
          payment of the exit fee pursuant to section 162(a).                         
               C.  The Entrance Fee                                                   
                    1.  Introduction                                                  
               The entrance fee is imposed by 12 U.S.C. section                       
          1815(d)(2)(E)(iii) (Supp. I, 1988) in an amount to be determined            
          by the FDIC.  The FDIC is guided in making that determination as            
          follows:                                                                    
               in the case of a conversion transaction in which the                   
               resulting or acquiring depository institution is a Bank                
               Insurance Fund member, the fee shall be the approximate                
               amount which the Corporation calculates as necessary to                
               prevent dilution of the Bank Insurance Fund, and shall                 
               be paid to the Bank Insurance Fund;                                    
          12 U.S.C. sec. 1815(d)(2)(E)(iii)(I) (Supp. I, 1989).  With                 
          respect to transactions such as the purchase, regulations                   
          establish the amount of the entrance fee as “the product derived            
          by multiplying the dollar amount of the entrance fee deposit base           
          transferred from the Savings Association Insurance Fund member to           
          the Bank Insurance Fund member by the Bank Insurance Fund ratio.”           
          12 C.F.R. sec. 312.4(c)(2) (1991).  The term “entrance fee                  
          deposit base” is defined in 12 C.F.R. section 312.1(g) (1991) as            
          follows:                                                                    
                    The term "entrance fee deposit base" generally                    
               refers to those deposits which the Federal Deposit                     
               Insurance Corporation, in its discretion, estimates to                 





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