In North Carolina National Bank Corp. v. United States, the Court of Appeals for the Fourth Circuit held that certain expenditures incurred by a national bank in connection with, yet prior to, the opening of branch offices were deductible under I.R.C. section 162 as ordinary business expenses. In Central Texas Savings & Loan Association v. UnitedStates, the Court of Appeals for the Fifth Circuit held that similar costs incurred by a savings and loan institution in its branching activities were capital rather than ordinary in nature, and could not be deducted under section 162.
David F. Webb,
The Deductibility of Bank Branching Expenditures: Central Texas Savings & Loan Association v. United States: A Weak Rebuttal to NCNB Corp. v. United States,
U. Rich. L. Rev.
Available at: http://scholarship.richmond.edu/lawreview/vol19/iss1/8