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(1977); Enoch v. Commissioner, 57 T.C. 781, 794-795 (1972);
Lovejoy v. Commissioner, 18 B.T.A. 1179 (1930).
Respondent's position is that ME is required to amortize the
fees over an 11-year period because that is the definite period
of the loan. Respondent argues that we should view the
construction loan and the permanent loan from SouthTrust Bank as
a single loan. Petitioners counter that the two loans were
properly treated as separate loans for purposes of amortizing the
fees because the loans were bargained for separately and contain
different material terms.
We agree with petitioners on this issue. The instant case
is distinguishable on its facts from the cases cited by
respondent. See Wilkerson v. Commissioner, 70 T.C. 240 (1978),
revd. on another issue 655 F.2d 980 (9th Cir. 1981); Lay v.
Commissioner, supra; Williams v. Commissioner, T.C. Memo. 1981-
643. Unlike those cases, ME's original loan documents do not
refer to the permanent loan or otherwise indicate that it had
bargained for permanent financing at the time it obligated itself
under the construction loan. Rather, it separately negotiated
and obtained a commitment for permanent financing from SouthTrust
Bank less than a month before the due date of the construction
loan. ME was also required to pay an additional commitment fee
in the amount of $5,000 for its permanent loan.
Respondent points out that the permanent loan documents
include words such as "renewal", "extension", "modification", and
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