Marty (M) retires from MNO partnership, an accounting firm. The partnership has the following balance sheet:

Asset	FMV	Adj. Basis	Liab./Equity	FMV	Adj. Basis
Cash	$240,000	$240,000	Capital M	$300,000	$100,000
A/R	$300,000	$0	Capital N	$300,000	$100,000
Land	$360,000	$60,000	Capital Q	$300,000	$100,000
Total	$900,000	$300,000	Total	$900,000	$300,000

The partnership pays Marty $150,000 a year for 2 years.

a. What are the consequences to Marty in Year 1?

b. How would the consequences in Year 1 be if instead Marty received $200,000 a year for 2 years?