All Topics / Legal & Accounting / Loan discharge fees – Deductable?

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  • Profile photo of diclemdiclem
    Member
    @diclem
    Join Date: 2003
    Post Count: 537
    June 3, 2008 - 4:24 am

    Hi,
    I am considering refinancing one of my investment loans, however there will be discharge fees of 1% of the original balance and a $500 deferred establishment fee. They also paid $900 dollars for LMI that would be payable if I paid out the loan.

    Does anyone know if any of these fees would be tax deductable as it is an investment loan? Or do I just have to wear it?
    Thanks,
    Sue

    Profile photo of AVDAVD
    Participant
    @avd
    Join Date: 2008
    Post Count: 8
    July 20, 2008 - 12:39 am

    Hi!

    Generally borrowing costs are amortised over 5 years or the life of the loan, whichever is shorter.  The old borrowing costs on the loan you are paying out that you will currently be claiming over 5 years are amortised in full the year that you refinanced.

    Regards,

    Alysha

    Profile photo of diclemdiclem
    Member
    @diclem
    Join Date: 2003
    Post Count: 537
    July 20, 2008 - 10:58 am

    Thank you for your reply Alysha,
    Sue

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