MEM Partners Was Formed During the Current Tax Year

question 45

Multiple Choice

MEM Partners was formed during the current tax year.It incurred $20,000 of organizational expenses,$100,000 of startup expenses,and $200,000 of syndication costs.Which of the following statements is correct regarding these payments?

• A)MEM may deduct $5,000 of the syndication costs;the remaining amount must be amortized.
• B)MEM must amortize the $20,000 of organizational expenses over 180 months.
• C)MEM's startup expenses are amortized over 60 months.
• D)MEM must file an election to deduct and/or amortize its organizational expenses,startup costs,and syndication costs.
• E)None of the above statements are true.

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Definitions:

Variable-interval

Variable-interval describes a schedule of reinforcement where a response is rewarded after an unpredictable amount of time has passed, in operant conditioning.

Classical Conditioning

A method of learning in which two stimuli are consistently associated; the response initially produced by the second stimulus ultimately becomes triggered by just the first stimulus alone.

Extinction

The process through which the conditioned response is weakened by presenting the conditioned stimulus without the unconditioned stimulus, eventually leading to the cessation of the conditioned response.

Conditioned Stimulus

A stimulus that initially has no response connected to it but gains the power to evoke a response through association with an unconditioned stimulus.