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Are the following items tax deductible with regards to an SBA loan?

Are the following items tax...

Are the following items tax deductible with regards ***** ***** SBA loan ? 1. SBA guaranty fee 2. packaging fee 3. Environmental expense ( towards environmental assessment ) 4. Appraisal fee What documentation should I provide when I file tax returns?

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Answered in 46 minutes by:
7/10/2011
CGCPA
CGCPA, CPA
Category: Tax
Satisfied Customers: 3,820
Experience: over 40 years experience in tax matters
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These loan costs must be amortized over the period of the loan. If the loan is for 10 years, you will deduct 1/10 of the total of these costs each year (as an example). You are not required to provide documentation with the tax return but you are required to retain the documentation for until at least 3 years after the filing due date of the final return showing any deductions in case there is a tax audit.

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Customer reply replied 6 years ago
Thanks Charles, Of these 4 fees I already paid the following in the current year. Why do I need to amortize them over the period of the loan ?
2. packaging fee
3. Environmental expense ( towards environmental assessment )
4. Appraisal fee

The guaranty fee is being financed in the loan - So I understand if that needs to be amortized, but I don't quite follow why the above #2,#3 and #4 need to be amortized - Could you please explain ?
They need to be amortized simply because that is the requirement of the law. It is viewed that the benefit is derived over the life of the loan.
CGCPA
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