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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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