Partner X is distributed the following in complete liquidation of her partnership interest:

Basis FMV

Cash $30,000 $30,000

Inventory $30,000 $40,000

Land A $35,000 $20,000

$95,000 $90,000

X had a basis in her partnership interest of $75,000, so the land’s basis was reduced by $20,000 and had only a $15,000 basis in X’s hands. The remaining YZ partnership (which did have a Code Sec. 754 elections in effect) had the following remaining assets:

Basis FMV

Cash $40,000 $40,000

Inventory $30,000 $45,000

Unrealized Receive. $50,000 $45,000

Land B $25,000 $40,000

Building $45,000 $10,000

i.How much of an adjustment to basis would each of the partnership assets have?

ii. How much of an adjustment to basis would each of the partnership assets have if X’s basis in her partnership interest had been $140,000?