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?
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a. TEC's deducts the first $5,000 of startup expenses and amortizes the remainder over 180 months. |
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b. TEC treats the contributed property as a new MACRS asset placed in service on the date the property title is transferred. |
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c. TEC must capitalize the transfer tax and treat it as a new asset placed in service on the date the property is contributed. |
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d. TEC must amortize the $10,000 of organizational expenses over 180 months. |
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e. None of these statements are true. |
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