Commissions paid by lessor of commercial property

[jklcpa]

My client and his wife are lessors of commercial real estate, a strip shopping center. He wanted to expand the center with another anchor store. He moved one existing tenant and did extensive reovation and expansion at one end of the strip.

He paid a commission to a retail strategy group to find a suitable tenant and help negotiate the lease for this newly built space. The commission, stated as a percentage of the total lease payments, was paid in 2010 when the tenant moved in. Another similar percentage-based commission was also paid to a local realtor.

The lease has a 10 year term, so these commissions are a significant expenditure all in the one year, totalling over $60,000. Is this deductible all in 2010, or amortizable?

I am really drawing a blank as to what key phrases or terms to use in researching this. If any other preparers here have experience with commercial real estate in this regard, I would appreciate any guidance you could give, or help with the key words for me to research. My other question relates to the costs of relocating the other tenant, a Chinese take-out. From going through the invoices, most of the costs were for all of the leasehold improvements to set this take-out place in business again, and demolish the old place since that's where the new anchor store is attached to this strip shopping center.

Any help or guidance would be greatly appreciated.

[michaelmars]

amortize over the life of the lease.