Frank, Greta, and Helen each have a one-third interest in the FGH Partnership. On December 31,2017, the partnership reported the following balance sheet:

The partnership placed Asset 1 (seven-year property) in service in 2015 and Asset 2 (five-year property) in service in 2016. The partnership did not elect Sec. 179 expensing and elected out of bonus depreciation in both years. Accordingly, it computed the assets' adjusted bases at December 31, 2017 as follows:

At the end of business on December 31, 2017, Helen sold her partnership interest to Hank for $190,000. At the time of sale, the partnership had a Sec. 754 optional basis election in effect but has not elected to use the remedial method for allocating partnership items.?

Required: The partners have asked you to determine (1) the amount and character of Helen's gain or loss; (2) Hank's optional basis adjustment and its allocation to Asset 1 and Asset 2; and (3) the amount of depreciation allocated to Hank in 2018, including the effects of the optional basis adjustment. At a minimum, you should consult the following resources:

? IRC Sees. 743 and 751

? Reg. Sec. 1.743-1(j)

? Reg. Sec. 1.755-1

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FMV Partnership's Basis Assets: Cash $120,000 360,000 90,000 $570,000 $120,000 262,380 115,200 Asset 1 Asset 2 Total $497,580 Partners' Capital: Frank $165,860 165,860 165,860 $190,000 190,000 190,000 $570,000 Greta Helen Total $497,580 Asset 1 Asset 2 Cost Depreciation: $600,000 $240,000 $85,740 146,940 104,940 2015 $48,000 76,800 2016 (337,620) (124,800) 2017 Adjusted basis $262,380 $115,200