90
Opinion of the Court
found in the specific terms of § 162(a), which require that deductible expenses be "ordinary and necessary" and incurred "in carrying on any trade or business," 8 courts more frequently have characterized an expenditure as capital in nature because "the purpose for which the expenditure is made has to do with the corporation's operations and betterment, sometimes with a continuing capital asset, for the duration of its existence or for the indefinite future or for a time somewhat longer than the current taxable year." General Banc-shares Corp. v. Commissioner, 326 F. 2d, at 715. See also Mills Estate, Inc. v. Commissioner, 206 F. 2d 244, 246 (CA2 1953). The rationale behind these decisions applies equally to the professional charges at issue in this case.
IV
The expenses that National Starch incurred in Unilever's friendly takeover do not qualify for deduction as "ordinary and necessary" business expenses under § 162(a). The fact that the expenditures do not create or enhance a separate and distinct additional asset is not controlling; the acquisition-related expenses bear the indicia of capital expenditures and are to be treated as such.
The judgment of the Court of Appeals is affirmed.
It is so ordered.
8 See, e. g., Motion Picture Capital Corp. v. Commissioner, 80 F. 2d 872, 873-874 (CA2 1936) (recognizing that expenses may be "ordinary and necessary" to corporate merger, and that mergers may be "ordinary and necessary business occurrences," but declining to find that merger is part of "ordinary and necessary business activities," and concluding that expenses are therefore not deductible); Greenstein, The Deductibility of Takeover Costs After National Starch, 69 Taxes 48, 49 (1991) (expenses incurred to facilitate transfer of business ownership do not satisfy the "carrying on [a] trade or business" requirement of § 162(a)).
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