Lease Commissions under $5k

Hi everyone,

I'm working on some tax returns for commercial real estate owners. I read this website: https://perkinsaccounting.com/top-thing ... ould-know/ and it said that lease commissions under $5,000 should be expensed. However, I'm not seeing that in the code section except 1.263(a)-4(d)(6)(v). But I don't think the 263 regs apply since this is not something the company created. Does anybody have any idea where in the code section it says lease commissions under $5,000 can be expensed?

Thanks!

... to create, originate, enter into, renew or renegotiate with that party ...

is the exact language.

... to create, originate, enter into, renew or renegotiate with that party ...

is the exact language.

So you're saying that code section 1.263(a)-4(d)(6)(v) does apply?

No, I'm saying that the quoted regulation does apply. But wait awhile, you'll likely get an opinion from Coddington. Check back ,ater.

It would be de minimis under section 1.263(a)-4(e)(4)(iii). Since a lease is described in section 1.263(a)-4(c)(1)(vi), lease commissions can be de minimis under 1.263(a)-4(e)(4)(iii)(B).

See, told ya.

It would be de minimis under section 1.263(a)-4(e)(4)(iii). Since a lease is described in section 1.263(a)-4(c)(1)(vi), lease commissions can be de minimis under 1.263(a)-4(e)(4)(iii)(B).

Thank you for this research. This sounds like the deduction can be taken.

See, told ya.

Thanks! This is why I love this forum! They need to put a donation link or something. This forum has given me so much great information.

If you do not have an AFS (Applicable Financial Statement), I think you would be limited to $2,500 deduction, correct?

No, that rule applies to purchases of tangible property.