Length of Amortization - Lease Commission w Free Rent Months

[dennisj1]

A Commercial Real Estate building owner paid a leasing agent a commission for negotiating the renewal of a lease.  The lease was for 36 months; 2 months free for January and February, 2020, then 34 months at $1,000 per month (total 36 months).

When amortizing the lease commission, is it amortized over 34 or the entire life of the lease (36 months)?  Normally lease commission are amortized over the lease term Not that it matters but the leasing agent was only paid a commission for the 34 month paid portion.

Any help or guidance appreciated!

Thanks!

[abctax55]

MY 'off the cuff (no deep thoughts or research)" instinct is 36 months as that's the lease term.

My second thought is ... this is NOT material 🙂

[BobKamman]

Was the commission more than $5,000?  A couple sources say you don't have to amortize amounts less than that, although I can't find where that originates.  

[qbteachmt]

"Not that it matters but the leasing agent was only paid a commission for the 34 month paid portion"

That's how the commission rate was determined. You seem to be mixing the perspectives. You stated it is a 36-month lease, and that is why there is a commission. The rest of the details are between the owner and the occupant. A 36-month lease, no matter what discounts and reductions were offered, is what you told us. And either 34-months or 36-months puts this into the same 3 years, anyway. If it mattered.