USA How to record mortgage loan closing cost?

[Daehan Ng]

We have a mortgage loan of $1.5m to refinance the other loans. So we consolidated the following debts into a new loan which the amount is $1.5m. We "wrap around" because the mortgage value exceeds the value of the property. We do this so that we can reduce the cost of the debt to the company which continues to operated at a loss over the past 5 years.

There are closing cost and expenses as we acquire the loan:
Reimburse Fee
Appraisal
Environmental fee
Lien searches
Legal fees
Title fees and expenses

The total is over $100K

My question is, are we going to just expense it out or to amortized these amounts?

 

[Simon W]

From my understanding, it sounds like you need to expense it. These aren't startup cost or capital improvements, so I don't believe it can be amortized. I am not a CPA so I can't say for sure. I recorded closing statements for acquisitions of properties and loans before and they were always put into Expenses.

 

[Drmdcpa]

They are amortizable over the life of the loan at least most finance costs are. Some can be expenses like allocated real estate and transfer taxes but most are intangibles.