Bella Partnership is an equal partnership in which each of the partners has a basis in his partnership interest of $10,000. Bella reports the following balance sheet:

.....................Assets:..............Tax Basis...........FMV

Inventory.................................$ 20,000......$ 30,000

Land..........................................10,000.........15,000

Totals....................................$ 30,000.......$ 45,000

Liabilities and capital:

Capital- Toby.............10,000

- Kaelin.......................10,000

- Andrew...................10,000

Totals.....................$ 30,000

a. Identify the "hot assets" if Toby decides to sell his partnership interest. Are these assets "hot" for purposes of distributions?

b. If Bella distributes the land to Toby in complete liquidation of his partnership interest, what tax issues should be considered?