A and B are equal partners in a personal services partnership. Each partner acquired her partnership interest for cash several years ago. None of the partnership’s asset sis Section 704(c) property. The partnership has the following balances sheet:

Assets				Liabilities and Partnerships' Capital
		A.B.	FMV
cash		13,000	13,000	Liabilities		2,000
capital assets				Capital	A.B.	FMV
	collectibles	1,000	3,000	A	10,000	15,000
	Other	6,000	2,000	B	10,000	15,000
Subtotal		7,000	5,000
Receivables		-	14,000
Total		20,000	32,000		20,000	32,000

A and B Basis figures represent each partner's outside basis including their share of liabilities.

Consider the tax consequences to B on her sale in each of the following alternative situations:

a). B sells her interest for $15,000 cash

b). B sells her interest for $16,000 cash and under the partnership agreement all gain from the sale of the collectibles is allocated to B

c). Same as (a), above, except that the collectibles have a basis of $3,000 and a fair market value of $1,000, and the other capital asset has a basis of $4,000 and a fair market value of $4,000.