Q- Ten years ago, A purchased residential rental real estate that he has been depreciating as MACRS property over 27.5 years. This year, when his adjusted basis in the property was $500,000, A transferred the property to a newly formed partnership in exchange for a 30 % interest in the partnership.

a- The partnership must treat the $520,000 basis in property, fees, and expenses as new MACRS property depreciable over the next 27.5 years. b- The partnership steps into the shoes of A with respect to the $500,000 basis in the property and depreciates the property over the remaining recovery period 17.5 years. c- With regard to the $20.000 of transfer taxes and tees related to the property that was incurred by the partnership, the partnership will be entitled to depreciate these expenses as new depreciable property with a 27.5 year recovery. d- Both b and c are correct. e- None of the above.