January 2019, business client used one of those online companies to take out a business loan (Cabbage) because they couldn't qualify for a loan through a local bank. The loan included fees of $20,000, which was financed on the original loan. So, original loan $100,000 principal, interest $35,000, fees $20,000 to be paid back over 5 years. November 2019, client qualified for a loan through a local bank and refinanced the loan. Client also refinanced those original fees into the new loan. New loan is $85,000 principal payoff, $18000 original loan fees payoff, $4,500 new loan origination fees, interest rate of 5.5% over 10 years.
My questions is, the balance of the $18,000 of old loan fees, are they amortized over the life of the new loan or are they fully deductible on 2019?
My questions is, the balance of the $18,000 of old loan fees, are they amortized over the life of the new loan or are they fully deductible on 2019?