1.John holds 10 percent interest in SS Partnership for past three years. His basis in the partnership is $200,000 which includes a $100,000 share of non-recourse debt that is allocated to him.

If John sells his interest in the partnership to Sally for $400,000, what would be Sally's tax basis in the partnership interest?

a.$200,000

b.$300,000

c.$400,000

d.$500,000

Please answer the question in detail. Choose the correct answer and explanation and the incorrect answer and explanation.

I also need introduction and conclusion.