________ At the beginning of the tax year, Zachs basis for his partnership interest and his amount at risk in the partnership was $30,000. His share of partnership items for the year consisted of tax-exempt interest income of $2,000 and an ordinary loss of $44,000. He also received a distribution from the partnership of $20,000 cash during the year. For the tax year, Zach will report:

1. A nontaxable distribution of $20,000, and ordinary loss of $10,000, and a suspended loss carryforward of $34,000.
2. An ordinary loss of $32,000, a suspended loss carryforward of $12,000, and a taxable distribution of $20,000.
3. A nontaxable distribution of $20,000, an ordinary loss of $12,000, and a suspended loss carryforward of $32,000.
4. An ordinary loss of $44,000 and a nontaxable distribution of $20,000.

________ 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 deducts the first $5,000 of startup expenses and amortizes the remainder over 180 months.

d. TEC must capitalize the transfer tax and treat it as a new asset placed in service on the date the property is contributed.