For accounting purposes, SFAS No. 91 requires, that loan origination costs and loan committmetn fees be capitalized and amortized -- as a yield adjustment -- over the life of the associated loan.
However, for tax purposes The so called Loan commitment fees are not amortized (capitalized).
The tax treatment of these fees is not the same as the accounting treatment.
this article descibes in layman's terms the process.
Please let me know if you have any quesitons. The referece includes a precedent court case.
yes, they apply to the lender. I use the articles rather than the actual text of the IRS regs because the IRS regs are harder to understand sometimes. AND in this case you needed the benefit of the precedence if you were the lender. Since you were using terminology about the accounting, I took it to mean you were the lender.
As the borrower, this depends on the purpose of the loan.
Is this a rental property?
Primary or secondary residence?
AND are you using cash accounting or accrual accounting?
According to Deloitte, and Millers GAAP guide,
1. the borrower recognizes the committment fees when the service is performed.
2. The origination fees are taken over the life of the loan.
AND 2006 miller GAAP Guide, as accessed through Central Michigan University Research Library.
having trouble finding my original references.
You do not have to accept my answer.