1.) Marco, Jaclyn, and Carrie formed Daxing partnership (a calendar year-end entity) by contributing cash 10 years ago. Each partner owns an equal interest in the partnership. Marco, Jaclyn, and Carrie each have an outside basis in his/her partnership interest of $104,000. On January 1 of the current year, Marco sells his partnership interest to Ryan for a cash payment of $137,000. The partnership has the following assets and no liabilities as of the sale date:

Tax Basis Fair Market Value

Cash $ 18,000 $ 18,000

Accounts receivable -0- 11,000

Inventory 69,000 81,000

Equipment 180,000 225,000

Stock investment 45,000 75,000

Totals $ 312,000 $ 410,000

The equipment was purchased for $240,000 and the partnership has taken $60,000 of depreciation. The stock was purchased 7 years ago. What is the total amount of the hot assets (751(a)) for this sale, i.e., the amount that would require gain or loss to be recharacterized as ordinary income?

2.) AJ is a 30% partner in the Trane partnership, a calendar year end entity. On January 1, AJ has an outside basis in his interest in Trane of $73,000, which includes his share of the $50,000 of partnership liabilities. Trane generates $42,000 of income during the year and does not make any changes to its liabilities. On December 31, Trane makes a proportionate distribution of the following assets to AJ to terminate his partnership interest:

Tax Basis FMV

Inventory $ 56,000 $ 65,000

Land 30,000 25,000

Totals $ 86,000 $90,000

What is AJs basis in the land?