12/13/23, 12:52 PM
Document
https://v2.cengagenow.com/media/js/manualGrading/previewInWindow.html
1/2
Discussion Question 10-5 (LO. 4)
If a partner contributes depreciable or amortizable property to the partnership, how is the basis of those
properties recovered? In addition, what types of expenditures might a new partnership incur? How are those
costs treated for Federal tax purposes?
In the chart below, for each expenditure listed, select the tax treatment of expenditures of a new partnership
and the applicable Code section.
Type of
Expenditure
Contributed depreciable or amortizable property
Treatment
✔
Reference
✔
Type of
Expenditure
Acquisition of property
Treatment
✔
Reference
✔
Type of
Expenditure
Startup expenses
Treatment
✔
Reference
✔
Type of
Expenditure
Organization costs
Treatment
✔
Reference
✔
Type of
Expenditure
Syndication costs
Treatment
✔
Reference
✔
Type of
Expenditure
Goodwill and similar intangible assets
Treatment
✔
Reference
✔
Type of
Expenditure
Other intangibles
Treatment
✔
Reference
✔
Partnership “steps into shoes” of contributing partner
§ 168(i)(7), Reg. § 1.167(a)–3
Capitalized and depreciated
§ 167, § 168, § 179
$5,000 expensed; remainder capitalized and amortized over 180 months
§ 195
$5,000 expensed; remainder capitalized and amortized over 180 months
§ 709
Capitalized; no amortization permitted
§ 709
Amortized over 15 years
§ 197
Amortized over useful life
Reg. § 1.167-3
