- 69 -
There’s other evidence of petitioner’s awareness of the
importance of that connection. In its brief, petitioner argued
in the alternative that, if the fees were capitalized, they
should be amortized over the life of the “core deposits” acquired
from Community. See Brief for Petitioner at 24-25.5 Finally,
respondent’s long-term benefit argument sufficiently raised the
issue whether the fees were part of the cost of acquiring capital
assets, as I explained supra pp. 64-65.
Treating the Fees as Insurance Premiums Is Also Insufficient
Even if I accepted the majority’s invitation to defer
consideration of the asset acquisition “theory” to another day, I
would still conclude that the fees must be capitalized. The
majority assert that deduction is proper because any long-term
benefit to Metrobank “is insignificant when weighed against the
primary purpose for the payment of the fees.” Majority op. p.
20. According to the majority, that primary purpose was to
5 There is no occasion in the case at hand to consider
petitioner’s alternative argument that, if the fees are
capitalizable, petitioner is entitled to amortize them over a 10-
year period; there is no evidence of useful life in the
stipulated record. It does seem to me that amortization should
probably be allowed over such useful life of the core deposits
acquired as could be shown. See Citizens & Southern Corp. v.
Commissioner, 91 T.C. 463 (1988), affd. without published opinion
900 F.2d 266 (11th Cir. 1990); see also First Chicago Corp. v.
Commissioner, T.C. Memo. 1994-300; Trustmark Corp. v.
Commissioner, T.C. Memo. 1994-184, and compare Field Serv. Adv.
Mem. 2000-08-005 (Feb. 25, 2000), where, in a transaction similar
to the case at hand, the taxpayer amortized the entrance and exit
fees over a 10-year period for financial statement purposes.
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