Metrocorp, Inc. v. Commissioner
United States Tax Court
M, a State bank, acquired a portion of the assets and assumed a portion of the deposit liabilities of C, a failed Federal savings association. Before the transaction, the deposit liabilities of M and C were insured by different funds (B and S, respectively) administered by the Federal Deposit Insurance Corporation.
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M, a State bank, acquired a portion of the assets and assumed a portion of the deposit liabilities of C, a failed Federal savings association. Before the transaction, the deposit liabilities of M and C were insured by different funds (B and S, respectively) administered by the Federal Deposit Insurance Corporation. The transaction was a "conversion transaction" under 12 U.S.C. sec. 1815(d)(2)(B) (1994), because M and C each participated in a different fund, and M assumed C's deposit liabilities. R determined that the exit and entrance fees related to the transaction which M paid to S and B,…
1DissentBeghe, J.
The stipulated facts establish that Metrobank paid the exit and entrance fees to acquire selected assets and deposits of Community. At least some of the acquired assets were capital, because Metrobank could expect to receive significant long-term benefits from them. See Citizens & S. Corp. v. Commissioner, 91 T.C. 463 (1988) (bank’s acquisition of “core deposits” from another institution gave rise to amortizable intangible asset), affd. without published opinion 900 F.2d 266 (11th Cir. 1990). Because the exit and entrance fees were paid to acquire capital assets, they must be capitalized. See…
2Cases cited26 opinions
- Indopco, Inc. v. CommissionerSupreme Court of the United States · 1992
- Woodward v. CommissionerSupreme Court of the United States · 1970
- Commissioner v. Lincoln Savings & Loan Ass'nSupreme Court of the United States · 1971
- Commissioner v. Idaho Power Co.Supreme Court of the United States · 1974
- Leahy v. CommissionerUnited States Tax Court · 1986
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