On March $31,2020,$ the book and tax "balance sheet" of the ABC partnership was as

follows:

The FMV of the partnership's assets as of March $31,2023$ were as follows: Cash

$$160,000$; Inventory, $$120,000$; Land #$1,$ $$190,000$ and Land #$2,$ $$145,000.$

Assume Arlene agrees to leave the partnership and is willing to accept $$20,000$ of

Cash, Inventory $($FMV $$40,000$ and I$/$S Basis $$29,000)$ and Land #$2($FMV of

$$145,000$ and I$/$S Basis $$93,000)$ in exchange for her entire interest in the

partnership.

a$.$ What are the two $(2)$ journal entries required to be made on the books of the

partnership as a result of the liquidation of Arlene's interest in the

partnership? Make the journal entries.

b$.$ Is the distribution to Arlene in liquidation of her interest proportionate or

disproportionate? Explain your answer.

c$.$ Regardless of your answer to part $($b$),$ above, assume for the purpose of this

part that the distribution to Arlene is a proportionate distribution. What is

the amount and character of the gain, if any, that Arlene must recognize in

connection with the partnership's distribution of the Cash, Inventory and Land

#$2$ to her? Explain your answer.

d$.$ Regardless of your answer to part $($b$),$ above, assume for the purpose of this

part that the distribution to Arlene is a proportionate distribution. What is

Arlene's basis in the Inventory and Land #$2?$ Explain your answer.