1. DiaperBelly Partners as a partnership engaged in the manufacture and sale of baby bottles and pacifiers. It his own one third each by BeBe, Maia and Chris. Each of these people had originally funded the partnership with $150,000 contribution. On July 1, after the partnership has been operating for approximately 3 years, BeBe sells her one third interest in the partnership to Dana. At that point, the partnership balance sheet looks like this:

ASSETS A.B. VALUE CAPITAL A.B. VALUE

CASH 90,000 90,000 BEBE 150,000 270,000

INVENTORY 150,000 180,000 CHRIS 150,000 270,000

RECEIVABLES 0 90,000 MAIA 150,000 270,000

1231 ASSET 210,000 450,000 - - -

450,000 810,000 450,000 810,000

1. What effect on BeBe if she sells her interest for $270,000 cash?
2. Assume instead that each partner originally contributed $300,000 cash, and that the
3. present outside basis of each is therefore also $300,000, and that the basis of the 1231
4. asset to the partnership is $660,000. BeBe sells her interest to Dana for $270,000 cash
5. Assume instead that each partner originally contributed only $90,000 cash instead of
6. $150,000 cash, and the 1231 asset was purchased and held subject to a liability of $180,000. BeBe sells her interest to Dana for $210,000 cash.