1. On January 1 of year one, Nupartner purchased a one-third interest in a partnership for $40,000. At the time of purchase the partnership had the following assets:

A.B. F.M.V.

Accounts Receivable $0 $30,000

Land 60,000 90,000

1. If 754 had not been elected by the partnership, what result to Nupartner upon collection of the receivables?
2. What result to Nupartner in (a), above, if the partnership had made a 754 election?
3. Who makes a 754 election? When and how must the election be made?
4. Should Nupartner have conditioned his purchase of the partnership interest upon a 754 election?
5. Will Nupartners purchase and the 754 election have any immediate tax impact on the remaining old partners?
6. Will the 743(b) basis adjustment affect Nupartner in situations other than on collection of partnership income or sales of partnership property?
7. At the end of year three, the partnership had earnings, all of which had been distributed, and it continued to hold the identical accounts receivable and land, each of which had the same basis and fair market value. Assuming no 754 election, what result to Nupartner if, before the receivables are collected, he sells his partnership interest to Buyer for $40,000?
8. What result to Nupartner in (g), above, if the partnership had made a 754 election?
9. What is Buyers inside basis in (h), above?
10. If the partnership properly maintained capital accounts and the selling partners capital account prior to the sale of his interest was $20,000, what is Nupartners capital account upon purchase of his one-third interest for $40,000 if: i) A 754 election were in effect; ii) A 754 election were not in effect See Reg. 1.704-1(b)(2)(iv)(l), (m)(1) and (2)
11. If a 754 election is in effect, will each new purchasing partner create havoc for the partnerships accountant?