TEC Partners Was Formed During the Current Tax Year

question 170

Multiple Choice

TEC Partners was formed during the current tax year. It incurred $10,000 of organizational expenses, $80,000 of startup expenses, and $5,000 of transfer taxes to retitle property contributed by a partner. The property had been held as MACRS property for ten years by the contributing partner, and had an adjusted basis to the partner of $300,000 and fair market value of $400,000. Which of the following statements is correct regarding these items?

• A) TEC treats the contributed property as a new MACRS asset placed in service on the date the property title is transferred.
• B) TEC must amortize the $10,000 of organizational expenses over 180 months.
• C) TEC's deducts the first $5,000 of startup expenses and amortizes the remainder over 180 months.
• D) TEC must capitalize the transfer tax and treat it as a new asset placed in service on the date the property is contributed.
• E) None of the above statements are true.

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Definitions:

Internal Factors

Elements within an organization that can influence its operations such as culture, values, and internal relationships.

Worth Of A Job

The perceived value or importance of a job, often evaluated in terms of its contribution to organizational goals, societal needs, or personal fulfillment.

Employer's Ability To Pay

An assessment of an employer's financial capability to meet salary demands and provide benefits to its employees.

Job Ranking

A method of evaluating jobs relative to each other within an organization based on their overall importance or complexity.