Corporation purchased land How to account for SBA Guarantee Fee

[Tax Prep by Deb]

I have a client who took out an SBA Loan to purchase a business/property.  The Settlement paperwork is showing they were charged an SBA Guarantee Fee of 37,075.  My research shows this not to be deductible, but how do I enter this in Quickbooks so that I don't mess anything up?

[DANRVAN]

12 hours ago, Tax Prep by Deb said:

My research shows this not to be deductible,

I am not familiar with this, can you share your source?

[BulldogTom]

Sounds like acquisition costs to me.   Amortized.   If you are saying it is not "fully deductible as an expense in year 1" then I agree with you.   

In QB, debit loan fees (LT asset) and credit Loan Payable (if part of the loan) or cash if paid upfront.

Tom
Longview, TX 

[Lee B]

I did some online searches yesterday. A number of non authoritative sources all say that it's not tax deductible, which puzzled me.

The best source I found was in The Tax Advisor:   https://www.thetaxadviser.com/issues/2021/feb/Sec-163j-classification-lender-fees.html

[DANRVAN]

36 minutes ago, Lee B said:

The best source I found was in The Tax Advisor

I don't see where the OP's issue is discussed in that article.  It really does not address the claim that any of the loan fees are nondeductible.

As I read it, the focus of the article is is on which fees are not considered interest expense subject to the Sec. 163(j) limitation.

If in fact the fees in the OP are not deductible, they would become part of the acquisition cost of the property (basis).

Without any authoritative cite, I  would amortize over the life of the loan.