1. Donna purchased Dennis's one-third interest of the DEF LLC (which is taxed as a partnership) for $125,000. In connection with Donna's purchase, the LLC made a $ 754 election. The DEF LLC uses the accrual method of accounting with respect to sales of inventory and the cash method with respect to the provision of services. When Donna purchased her one-third interest, the DEF LLC's assets and capital accounts were as follows: Assets Cash Accounts Receivable Inventory Land Building Adjusted Basis $9,000 $6,000 $60,000 $45,000 $105,000 $225,000 F.M.V. $9,000 $36,000 $120,000 $30,000 $180,000 $375,000 Capital Accounts D E F Tax=Book $75,000 $75,000 $75,000 F.M.V. $125,000 $125,000 $125,000 $225,000 $375,000 The land and building are non-depreciable $1231 assets. A. What are the tax consequences to Dennis? B. Determine the section 743 (b) basis adjustments for each of the LLC's assets with respect to Donna. 1. Donna purchased Dennis's one-third interest of the DEF LLC (which is taxed as a partnership) for $125,000. In connection with Donna's purchase, the LLC made a $ 754 election. The DEF LLC uses the accrual method of accounting with respect to sales of inventory and the cash method with respect to the provision of services. When Donna purchased her one-third interest, the DEF LLC's assets and capital accounts were as follows: Assets Cash Accounts Receivable Inventory Land Building Adjusted Basis $9,000 $6,000 $60,000 $45,000 $105,000 $225,000 F.M.V. $9,000 $36,000 $120,000 $30,000 $180,000 $375,000 Capital Accounts D E F Tax=Book $75,000 $75,000 $75,000 F.M.V. $125,000 $125,000 $125,000 $225,000 $375,000 The land and building are non-depreciable $1231 assets. A. What are the tax consequences to Dennis? B. Determine the section 743 (b) basis adjustments for each of the LLC's assets with respect to Donna