Basic Partnership, a cash-basis calendar-year entity, began business on February 1, 2007. Basic incurred and paid the following in 2007:

Filing fees incident to the creation of the partnership

$ 3,600

Accounting fees to prepare the representations in offering materials

12,000

Basic elected to deduct costs. What was the maximum amount that Basic could deduct on the 2007 partnership return?

  1. $15,600
  2. $ 3,600
  3. $ 660
  4. $ 220