Hi all,

I wanted to have a sanity check. I'm looking at Treas. Reg 1.263(a)-4 to determine if loan costs are expensed or capitalized if they're under $5,000. Under 1.263(a)-4(b), it says that intangibles must be capitalized and 1.263(a)-4(c)(1)(ii) specifically identifies debt instruments.

However, 1.263(a)-4(e)(4)(iii)(A) says that de minimis costs, which they define as paid in the process of investigating or otherwise pursuing a transaction, can be expensed under $5,000. But 1.263(a)-4(e)(4)(iii)(B) says that it doesn't include commissions.

So from these paragraphs, I'm interpreting it as loan costs are deductible (excluding commissions) if they are under $5,000. Does that sound right or am I missing anything?

Thanks in advance for any help.