What's the correct code section for amortization of finance costs on Form 4562?

The code section you're looking for is likely Section 709. This section specifically deals with organization and syndication costs for partnerships, which would include finance costs. When you're filling out Form 4562's amortization section, Section 709 is appropriate for partnership organization and startup costs. These are typically amortized over 180 months (15 years). Section 461(g) is indeed primarily for cash basis taxpayers dealing with prepaid interest, so your instinct there was good. Since you mentioned you're on accrual basis, that wouldn't be the correct code to use. Make sure you're also looking at the amortization start date - this should be the month the expense was incurred. The amortizable amount would be the total finance costs that you're spreading out over that 15-year period.

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I'm pretty sure for loan acquisition costs, you'd use IRC Section 163. That's what my CPA used last year for our partnership's real estate loan origination fees and closing costs. Specifically, the costs get amortized over the life of the loan, not the standard 15-year period that applies to organization costs. So if you have a 30-year mortgage, those costs would be spread over 360 months on your 4562.

Isn't this covered under Section 195 for startup expenditures? That's what I've used in the past when filling out the 4562 for similar costs.

Based on the discussion here, it sounds like Section 163 is the right approach for your loan acquisition costs. I went through something similar last year with our partnership's commercial property financing. One thing to double-check though - make sure you're distinguishing between different types of loan costs. Some costs like appraisal fees or environmental assessments might need to be capitalized into the property basis rather than amortized separately. The true financing costs (origination fees, points, etc.) are what go on the 4562 under Section 163. Also, just as a heads up, if any of those loan costs were paid by the seller on your behalf, those typically get added to your property basis instead of being amortized as financing costs. The IRS can be pretty specific about how these different costs are treated, so it's worth reviewing exactly what's included in your total. Good luck with the filing! The 4562 can be tricky but once you get the right code section it's much more straightforward.