Allison, Keesha, and Steven each own equal interests in KAS Partnership, a calendar-year-end, cash-method entity. On January 1 of the current year, Steven's basis in his partnership interest is $30,750. During January and February, the partnership generates $34,950 of ordinary income and $5,670 of tax-exempt income. On March 1, Steven sells his partnership interest to Juan for a cash payment of $53,250. The partnership has the following assets and no liabilities at the sale date:

Tax Basis FMV

Cash $37,500 $37,500

Land held for investment37,500 75,000

Totals $75,000 $112,500

a.Assuming KAS's operating agreement provides for an interim closing of the books when partners' interests change during the year, what is Steven's basis in his partnership interest on March 1 just prior to the sale?

b.What is Juan's initial basis in the partnership interest?

c. What is the partnership's basis in the assets following the sale?