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Commercial Loan Prepayment Penalty

Technical topics regarding tax preparation.
#1
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29-Nov-2017 8:05pm
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Los Angeles
My client refinanced a SBA 504 loan and refinanced with the same lender. He paid $86k in prepayment fees to the bank and $8k to the SBA for the second loan on the building.
Does the prepayment fee get capitalized or deducted as a current year interest expense?
If he had instead refinanced with a different bank would this be deductible?
 

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