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they are incurred “in connection with” the acquisition of a
capital asset. See American Stores Co. & Subs. v. Commissioner,
114 T.C. 458, 469 (2000). But see Wells Fargo & Co. & Subs. v.
Commissioner, 224 F.3d 874, 885-888 (8th Cir. 2000)
(distinguishing expenditures directly related to capital
transactions from expenditures indirectly related to such
transactions), affg. in part and revg. in part Norwest Corp. &
Subs. v. Commissioner, 112 T.C. 89 (1999).
Respondent Sufficiently Raised Asset Acquisition Issue
According to the majority, respondent failed to argue that
the exit and entrance fees were connected with Metrobank’s asset
acquisition; we should therefore defer consideration of this
“theory” to another day. Majority op. p. 11. I disagree.
Although respondent didn’t specifically argue that the fees
were paid to acquire Community’s assets and deposits, respondent
did argue that the fees created significant long-term benefits
for Metrobank. The presence of significant long-term benefits is
relevant to the case at hand because it serves to distinguish
payments that result in the acquisition of capital assets from
those that don’t. See sec. 263 (cost of “permanent improvements
or betterments” must be capitalized); INDOPCO, Inc. v.
Commissioner, supra at 87-88 (long-term benefit is an undeniably
important and prominent, if not predominant, characteristic of a
capital asset within the meaning of section 263, in part citing
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