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,…
1Opinion of the Court
OPINION
Laro, Judge:
The parties submitted this case to the Court without trial. See Rule 122. Respondent determined deficiencies of $15,288, $14,372, and $14,375 in petitioner’s respective taxable years ended October 31, 1993, 1994, and 1995. Following concessions, we must decide whether petitioner may deduct the exit and entrance fees which its subsidiary, Metrobank, paid to the Federal Deposit Insurance Corporation (fdic) with respect to a “conversion transaction” under 12 U.S.C. sec. 1815(d)(2)(B)(iv) (1994). We hold it may.1 Unless otherwise indicated, section references are to the…
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