26 U.S.C. § 709: Treatment of organization and syndication fees

Except as provided in subsection (b), no deduction shall be allowed under this chapter to the partnership or to any partner for any amounts paid or incurred to organize a partnership or to promote the sale of (or to sell) an interest in such partnership. the amount of organizational expenses with respect to the partnership, or $5,000, reduced (but not below zero) by the amount by which such organizational expenses exceed $50,000, and the remainder of such organizational expenses shall be allowed as a deduction ratably over the 180-month period beginning with the month in which the partnership begins business. In any case in which a partnership is liquidated before the end of the period to which paragraph (1)(B) applies, any deferred expenses attributable to the partnership which were not allowed as a deduction by reason of this section may be deducted to the extent allowable under section 165. are incident to the creation of the partnership; are chargeable to capital account; and are of a character which, if expended incident to the creation of a partnership having an ascertainable life, would be amortized over such life. Except as otherwise provided in this subsection, the amendments made by this section [enacting this section and amending sections 179, 704, 706, 707, and 761 of this title] shall apply in the case of partnership taxable years beginning after December 31, 1975 . The amendment made by subsection (e) [amending section 704 of this title ] shall apply to liabilities incurred after December 31, 1976 . Section 709(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by the amendment made by subsection (b)(1) of this section) shall apply in the case of amounts paid or incurred in taxable years beginning after December 31, 1976 .”