Elaine pays $$40,000$ cash for Martha's one$-$third interest in Lakewood Partnership. Just prior to the sale, Martha's basis in Lakewood is $$140,000.$ Lakewood reports the following balance sheet:

Tax Basis FMV

Assets

Cash $ $50,000$ $ $50,000$

Land $370,00070,000$

Totals $ $420,000$ $ $120,000$

Liabilities and capital

Capital$$Mary $ $140,000$

Capital$$Martha $ $140,000$

Capital$$Margaret $ $140,000$

Totals $ $420,000$

Assume the land had been purchased several years ago and the partnership does not have a $754$ election in place.

Note: Loss should be indicated by a minus sign.

Problem $10-56$ Part b $($Static$)$

b$.$ What is Elaine's basis in her partnership interest?