INDOPCO, Inc. v. Commissioner
United States Supreme Court
503 U.S. 79 (1992)
INDOPCO, Inc. (INDOPCO) (plaintiff), formerly known as National Starch and Chemical Corporation, was a Delaware corporation. Unilever United States Inc. (Unilever), one of INDOPCO’s suppliers, sought to acquire INDOPCO in a friendly takeover. INDOPCO agreed and accordingly hired investment bankers and attorneys to handle the transaction. INDOPCO incurred an investment banker fee of $2,225,586, legal fees of $505,069, and miscellaneous fees relating to the acquisition of $150,962. On its federal tax return for that year, INDOPCO claimed a business expense deduction for the investment banker fees only. The Commissioner (defendant) determined that INDOPCO could not deduct the expenses. INDOPCO petitioned the Tax Court and claimed a deduction for the investment banker fees in addition to the legal and miscellaneous fees. The Tax Court held that all the expenditures were capital investments and therefore non-deductible under § 162 of the Internal Revenue Code. The Court of Appeals affirmed. The United States Supreme Court granted certiorari.
Rule of Law
Holding and Reasoning (Blackmun, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.
Here's why 166,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 13,800 briefs, keyed to 187 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.