CHAPTER 6 SALES&EXCHANGES OF INTERESTS 8. The DEF cash method general partnership, which has not made a 754 election, had the following balance sheet at the time G purchased D's interest for $50,000. D contributed the inventory to the partnership at a time when the value of the inventory was $15,000. Assets ?.?. F.M.V. Cash 50,000 50,000 Inventory 30,000 10,000 Land 270,000 90,000 $350,000 $150,000 Partners' Capital A.B. F.M.V. $100,000 50,000 125,000 50,000 125,00050,000 350,000 $150,000 (a) Will the basis of the partnership's assets be adjusted under 743 as a result of D's sale to G? Should G urge the partnership to make a 754 election? (b) Assuming no adjustments are made to the basis of the partner- ship's assets, what will be the result to G if the partnership sells the inventory for $10,000? What result to G if the partnership sells the land for $90,000 CHAPTER 6 SALES&EXCHANGES OF INTERESTS 8. The DEF cash method general partnership, which has not made a 754 election, had the following balance sheet at the time G purchased D's interest for $50,000. D contributed the inventory to the partnership at a time when the value of the inventory was $15,000. Assets ?.?. F.M.V. Cash 50,000 50,000 Inventory 30,000 10,000 Land 270,000 90,000 $350,000 $150,000 Partners' Capital A.B. F.M.V. $100,000 50,000 125,000 50,000 125,00050,000 350,000 $150,000 (a) Will the basis of the partnership's assets be adjusted under 743 as a result of D's sale to G? Should G urge the partnership to make a 754 election? (b) Assuming no adjustments are made to the basis of the partner- ship's assets, what will be the result to G if the partnership sells the inventory for $10,000? What result to G if the partnership sells the land for $90,000