TEC Partners Was Formed During the Current Tax Year

question 24

Multiple Choice

TEC Partners was formed during the current tax year. It incurred $10,000 of organizational expenses, $80,000 of startup expenses, $200,000 of syndication costs, and $5,000 of transfer taxes to retitle property contributioned by a partner. Which of the following statements is correct regarding these payments?

• A) TEC may deduct $5,000 of the syndication costs; the remaining amount must be amortized.
• B) TEC must amortize the $10,000 of organizational expenses over 180 months.
• C) TEC's startup expenses are amortized over 60 months.
• D) TEC must add the transfer tax to the basis of the contributed property.
• E) None of the above statements are true.

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Definitions:

Order Instrument

A financial document or tool that directs the payment of money, often used in transactions to specify the payer and payee.

Negotiable

Capable of being discussed or modified in order to reach an agreement, or in terms of financial instruments, able to be transferred or assigned from one party to another.

Identified Person

An individual who has been recognized or named in a specific context or for a particular purpose.

Negotiable

Characteristic of a document or instrument that allows its transferability and enforceability by someone other than the original party.