86
Opinion of the Court
the type of business involved"). The Court has recognized, however, that the "decisive distinctions" between current expenses and capital expenditures "are those of degree and not of kind," Welch v. Helvering, 290 U. S., at 114, and that because each case "turns on its special facts," Deputy v. Du Pont, 308 U. S., at 496, the cases sometimes appear difficult to harmonize. See Welch v. Helvering, 290 U. S., at 116.
National Starch contends that the decision in Lincoln Savings changed these familiar backdrops and announced an exclusive test for identifying capital expenditures, a test in which "creation or enhancement of an asset" is a prerequisite to capitalization, and deductibility under § 162(a) is the rule rather than the exception. Brief for Petitioner 16. We do not agree, for we conclude that National Starch has overread Lincoln Savings.
In Lincoln Savings, we were asked to decide whether certain premiums, required by federal statute to be paid by a savings and loan association to the Federal Savings and Loan Insurance Corporation (FSLIC), were ordinary and necessary expenses under § 162(a), as Lincoln Savings argued and the Court of Appeals had held, or capital expenditures under § 263, as the Commissioner contended. We found that the "additional" premiums, the purpose of which was to provide FSLIC with a secondary reserve fund in which each insured institution retained a pro rata interest recoverable in certain situations, "serv[e] to create or enhance for Lincoln what is essentially a separate and distinct additional asset." 403 U. S., at 354. "[A]s an inevitable consequence," we concluded, "the payment is capital in nature and not an expense, let alone an ordinary expense, deductible under § 162(a)." Ibid.
Lincoln Savings stands for the simple proposition that a taxpayer's expenditure that "serves to create or enhance . . . a separate and distinct" asset should be capitalized under § 263. It by no means follows, however, that only expenditures that create or enhance separate and distinct assets are
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