TEC Partners Was Formed During the Current Tax Year

question 155

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 startup expenses are amortized over 60 months.
• D)TEC must capitalize the transfer tax and treat if as a new asset placed in service on the date the property is contributed.
• E)None of the above statements are true.