@itonewbie Thank you so much. I have read up on the suggested rulings and the walk away for me based on Rev. Rul 77-254 is that these costs should be capitalized and amortized. Here is the basis for m...
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@itonewbie Thank you so much. I have read up on the suggested rulings and the walk away for me based on Rev. Rul 77-254 is that these costs should be capitalized and amortized. Here is the basis for my conclusion...... "Rev. Rul. 77-254 (1977-2 CB 63). This ruling explains, "Once the taxpayer has focused on the acquisition of a specific business or investment, expenses that are related to an ATTEMPT to acquire such business or investment are capital in nature." I think that both appraisal and loan fee expenses are indications that the taxpayer had attempted to acquire another piece of land for development. Is my thought process in line with the interpretation of the ruling? I just want to be confident when I address this with my client so any further clarification will help a great deal.
Client incurred appraisal and loan fees in anticipation to borrowing funds for developing another project. Deal fell through and he has abandoned the idea of engaging in another project at least for ...
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Client incurred appraisal and loan fees in anticipation to borrowing funds for developing another project. Deal fell through and he has abandoned the idea of engaging in another project at least for the moment. Are those costs deductible 100% in the year incurred? I read where it says it is not deductible for a primary residence but I can't find information when taxpayer in the business of development.