USA Deferred Financing Costs treatment - Tax Basis

[Accountant212]

Accounting for amortization of deferred financing costs for real estate properties under tax treatment.

Under tax basis - are amortization expense of deferred financing costs capitalized or expensed for a property that's waiting to be constructed?

Is the treatment same as interest expense (where they are expensed until the construction process begin, then they get capitalized as part of the project cost), or are they capitalized in the construction in progress account from day 1 (i.e. before any construction activities). The cost has already been occurred.

 

[smallbushelp]

What type of deferred financing costs are you referring to? Amortization can't be capitalized - it is an expense. It's the base asset that is either capitalized or expensed. If it is capitalized, amortization is then the method by which you expense the capitalized asset. Most direct costs of long term construction projects are capitalized until the project is complete.

 

[Accountant212]

Deferred financing cost as in loan origination costs, legal fees associated with obtaining the loan, etc.
The question is - are these expensed or capitalized before the construction period. I understand they are capitalized during the construction period under tax basis... but not sure whether they are expensed or capitalized before construction starts.