Curly, Larry and Moe formed the CLM partnership by each contributing assets with a basis and fair market value of $200,000. In the following year, Moe sold his one-third interest to Alice for $225,000. At the time of the sale, the CLM partnership had the following balance sheet: Basis FMV Cash $200,000 $200,000 Land $400,000 $475,000 $600,000 $675,000 Shortly after Alice became a partner, CLM sold the land for $475,000. What are the tax consequences of the sale to Penny and the partnership (1) assuming there is no Section 754 election in place, (2) assuming the partnership has a valid Section 754 election?