Rev. Rul. 73-134

Revenue Ruling 68-590, 1968-2, C.B. 66, holds that a corporation that enters into certain agreements with a political subdivision of a state for the financing, construction, and operation of an industrial project is considered the owner of the project for Federal tax purposes. In that Revenue Ruling the political subdivision obtained the funds to finance the purchase or construction of the project by issuing "industrial development bonds" within the meaning of section 103(c)(2) of the Internal Revenue Code of 1954. The bonds were not general obligations of the political subdivision but were secured by, and payable solely from, proceeds derived from the leasing of the project.

No reference was made in Revenue Ruling 68-590 to the costs of issuing the bonds such as bond counsel fees, printing costs, and other such related fees which were paid by the corporation, or to the treatment, for Federal income tax purposes, of such costs.

Held, bond counsel fees, printing costs, and other related fees incurred by the corporation in the issuance of the bonds are expenditures made in the ordinary course of a trade or business with benefits extending beyond the taxable year. These expenditures are amortizable over the life of the bonds.

Revenue Ruling 68-590 is hereby amplified.