The IRS on Friday released Technical Advice Memorandum 2005-21-032, which ruled that expenses paid by a corporation to terminate a merger are nondeductible capital expenditures that must be capitalized under § 263. The IRS concluded that the costs could not be treated as an ordinary and necessary business expense under § 162 or as an abandonment loss under § 165.
IRS Treats Expenses to Terminate Merger as Nondeductible Capital Expenditures
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