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As previously stated, this Court has also equated the use of
borrowed money and interest with the use of property and rent.
See Albertson’s Inc. v. Commissioner, 95 T.C. at 421.
Respondent argues that petitioner’s favorable financing
represents a “liability”, not an “asset”. Respondent claims that
petitioner is “attempting to adjust, for tax purposes, the asset
side of its balance sheet to account for an overstatement in fair
market value terms of its liabilities.” We cannot agree with
respondent’s proposed characterization of petitioner’s favorable
financing as a liability. Indeed, as petitioner points out,
there is a valuable economic benefit associated with the below-
market interest rates on its financing arrangements as of January
1, 1985. It is this economic benefit which petitioner claims as
an intangible asset and upon which it bases its claimed
amortization deductions.
Respondent appears to make the same argument that he made in
the context of the core deposits cases. For example, in Peoples
Bancorporation & Subs. v. Commissioner, T.C. Memo. 1992-285,
respondent argued that core deposits are “liabilities” rather
than “property” for purposes of section 167 and the regulations
thereunder. We rejected that argument, stating that “Similar
arguments were considered in Citizens & Southern Corp. v.
Commissioner, 91 T.C. at 490 and 492. These arguments simply
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