8.The equal XYZ Partnership has the following balance sheets:

Basis FMV

Property A $39,000 $54,000

Property B $60,000 $42,000

Inventory A $3,000 $15,000

Inventory B $15,000 $12,000

$117,000 $123,000

Capital, X $35,000 41,000

Capital, Y 41,000 41,000

Capital, Z 41,000 41,000

$117,000 $123,000

XYZ has a Code Section 754 election in effect, and X sells her interest to W for $41,000 cash.The two Properties are both capital assets.Inventory A was contributed by X at a time when its unrealized appreciation was $6,000.At the time of the transfer, X's share of the partnership's basis in partnership assets is $35,000.

i.How much is the Code Sec. 743(b) adjustment to each asset?

ii.How much income would be allocated to each partner if, one year later, Property A is sold for $60,000?

$41,~000