Mortgage loan cost ammortization

[thisisme271]

Hi

on the depreciation and amortization worksheet, a 30 yr loan can be srtaightlined over 30 yrs with code 178.

What about commercial loan?

If I have a 5/1 ARM ammortized over 20 yrs, do I ammortize it over 20 years or can I ammortize over 5 years?

thank you.

[DianeW777]

The amortization of loan fees is amortized over the life of the loan.  For example, for a 20 year loan the allowable deduction would be for the number of  months in the year from the date the loan began to December 31st in year one.  In year two and so on, it would be a full 12 months. In your example it would be 240 months total unless paid off early.

If there was an early pay-off, the remainder of the fees would be deducted in full in the year the loan was paid in full.