concurring: Respondent chose to ask the Court to decide the issue of whether the exit fee and the entrance fee should be capitalized solely on the basis of respondent’s theory that those fees generated certain significant future benefits for Metrobank. The majority states that it will “decide this case as framed by respondent”. Majority op. p. 217. However, the majority rejects respondent’s reliance on Darlington-Hartsville Coca-Cola Bottling Co. v. United States, 273 F. Supp. 229 (D.S.C. 1967), affd. 393 F.2d 494 (4th Cir. 1968), and Rodeway Inns of Am. v. Commissioner, 63 T.C. 414 (1974),1 because: “The taxpayer in each of those cases purchased a capital asset incident to the payment of the expenses in dispute there.” Majority op. p. 225 note 10. I am concerned that such language by the majority could be read to suggest its view on what the result in this case would have been if respondent had argued that the exit fee and the entrance fee should be capitalized because such fees constitute amounts expended to acquire an asset with a life extending substantially beyond the taxable year of acquisition. See, e.g., Commissioner v. Idaho Power Co., 418 U.S. 1, 13 (1974); Woodward v. Commissioner, 397 U.S. 572, 575-576 (1970); Ellis Banking Corp. v. Commissioner, 688 F.2d 1376, 1379 (11th Cir. 1982), affg. in part and remanding in part T.C. Memo. 1981-123; American Stores Co. & Subs. v. Commissioner, 114 T.C. 458, 468-470 (2000). If the majority intended to express no opinion on what the result in this case would have been if respondent had advanced such an argument, the majority should not have used language that, in my view, could be construed to suggest such an opinion.2
I have considered and resolved the issue of whether the exit fee and the entrance fee should be capitalized solely on the basis of respondent’s theory that those fees produced certain significant long-term benefits for Metrobank. On the record presented, I, like the majority, reject respondent’s theory that the benefits which respondent asserts the fees in question produced are significant long-term benefits requiring capitalization of those fees.3 However, I disagree with the majority that the exit fee is a “final premium for insurance that it had already received”, majority op. p. 223, and that the entrance fee is a “premium * * * paid for the current year’s insurance”, majority op. p. 223. In my view, the record and 12 U.S.C. secs. 1815 and 1817 (1994) regarding the nature, use, and purpose of those nonrefundable fees, which were paid in five annual installments, belie the majority’s analogy of the exit fee and the entrance fee to premiums paid for insurance coverage provided.
Thornton, J., agrees with this concurring opinion.
On brief, respondent described those two cases as cases in which “the courts held that the taxpayers could not deduct expenses that were part of a plan to produce a positive business benefit for future years.”
Similarly, if the majority decided this case “as framed by respondent”, majority op. p. 217, the majority should not have concluded that, although respondent does not argue that the facts presented in this case are similar to the facts in Commissioner v. Lincoln Sav. & Loan Association, 403 U.S. 345 (1971), see majority op. p. 226, the facts in the instant case are not similar to those facts, see id.
Unlike the majority, I have not considered whether there are any benefits other than those alleged by respondent that are significant future benefits generated for Metrobank by the fees in question. See majority op. p. 222.