Legal fees related to Debt Issuance Costs

[Florida_EA]

What is the tax treatment of legal fees incurred related to the issuance of loan. Is it capitalized and amortized over the term of the loan or expensed

[Beersheba]

Not aware of any regulation for this, but it would appear the attendant fees (primarily bank fees more so than any other type) would be capitalized and amortized over the life of the loan.

[Rapid Robert]

For starters, I think you need to indicate what the proceeds of the loan are used for - personal, investment, business? I'm pretty sure it will affect the answer.

Normally, legal fees are only deductible if they are "related to producing or collecting taxable income or getting tax advice" (pub 529). So for example legal fees related to obtaining a mortgage on a personal residence would not be deductible.