(TCO 10) X-Temp Inc. incurred $275,000 research costs on the development of its formula for a new line of face creams. X-Temp obtained a 14-year patent on the formula from the U.S. government. Which of the following statements is true?

X-Temp is allowed to deduct 50% of the research costs.

X-Temp's tax basis in its patent is $275,000.

The $275,000 cost results in a favorable book-and-tax difference.

X-Temp is allowed to deduct the $275,000 research costs.