- 62 -
BEGHE, J., dissenting: The stipulated facts establish that
Metrobank paid the exit and entrance fees to acquire selected
assets and deposits of Community. At least some of the acquired
assets were capital, because Metrobank could expect to receive
significant long-term benefits from them. See Citizens &
Southern Corp. v. Commissioner, 91 T.C. 463 (1988) (bank’s
acquisition of “core deposits” from another institution gave rise
to amortizable intangible asset), affd. without published opinion
900 F.2d 266 (11th Cir. 1990). Because the exit and entrance
fees were paid to acquire capital assets, they must be
capitalized. See INDOPCO, Inc. v. Commissioner, 503 U.S. 79
(1992); Commissioner v. Idaho Power Co., 418 U.S. 1, 13 (1974)
(costs paid “in connection with” construction or acquisition of
capital assets must be capitalized); Woodward v. Commissioner,
397 U.S. 572 (1970) (expenses incurred in connection with
litigation originating in the acquisition or disposition of
capital assets must be capitalized, regardless of payor’s
subjective motive); A.E. Staley Manufacturing Co. & Subs. v.
Commissioner, 119 F.3d 482, 488 (7th Cir. 1997) (describing
Supreme Court’s INDOPCO decision as “merely reaffirming settled
law that costs incurred to facilitate a capital transaction are
capital costs”), revg. 105 T.C. 166 (1995); sec. 1.263(a)-2(a),
Income Tax Regs. (cost of acquisition of property having useful
life substantially beyond the taxable year is a capital
expenditure).
Page: Previous 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 NextLast modified: May 25, 2011