- 46 -
Petitioner asserts it is the borrower of the Bridge Loan, as the
successor to ACQ. Petitioner relies on Rev. Rul. 81-160, 1981-1
C.B. 312, which holds that a loan commitment fee constitutes a
cost of acquiring a loan and therefore must be deducted ratably
over the term of the loan, revoking an earlier ruling that
permitted a full deduction in the year paid. The issue at hand,
however, is who may deduct a loan commitment fee where the person
who procures the loan commitment is different from, albeit
related to, the borrower. Rev. Rul. 81-160, supra, offers little
guidance on that score.
Petitioner’s second argument is that it should be allowed to
deduct the expenses because it “directly benefited” from the
payment thereof. Petitioner relies on Lohrke v. Commissioner, 48
T.C. 679 (1967), and similar cases for this proposition.26 In
26 In all, petitioner cites 14 cases, including Lohrke v.
Commissioner, 48 T.C. 679 (1967); Fall River Gas Appliance Co. v.
Commissioner, 42 T.C. 850, 857-858 (1964), affd. 349 F.2d 515
(1st Cir. 1965); Snow v. Commissioner, 31 T.C. 585 (1958);
Fishing Tackle Prods. Co. v. Commissioner, 27 T.C. 638 (1957);
Dinardo v. Commissioner, 22 T.C. 430 (1954); L. Heller & Son,
Inc. v. Commissioner, 12 T.C. 1109, 1112 (1949); Scruggs-
Vandervoort-Barney, Inc. v. Commissioner, 7 T.C. 779, 785-788
(1946); Robert Gaylord, Inc. v. Commissioner, 41 B.T.A. 1119
(1940); Miller v. Commissioner, 37 B.T.A. 830 (1938); First Natl.
Bank of Skowhegan, Maine v. Commissioner, 35 B.T.A. 876 (1937);
Cepeda v. Commissioner, T.C. Memo. 1993-477, affd. without
published opinion 56 F.3d 1384 (5th Cir. 1995); Coulter Elecs.,
Inc. v. Commissioner, T.C. Memo. 1990-186, affd. without
published opinion 943 F.2d 1318 (11th Cir. 1991); Tex. & Pac. Ry.
Co. v. Commissioner, a Memorandum Opinion of this Court dated
Mar. 25, 1943; and Shasta Water Co. v. Commissioner, a Memorandum
(continued...)
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